Bitcoin miner Core Scientific signs major deal with Nvidia-backed firm CoreWeave, targets $3.5B in revenue

Core Scientific, a prominent provider of blockchain infrastructure, as well as one of the largest digital asset miners in North America, announced Monday it signed a 12-year agreement to provide 200 MW of data center space to CoreWeave, a GPU cloud provider backed by Nvidia. The mining firm expects to generate more than $3.5 billion in total cumulative revenue over the duration of the contract.

With the latest deal, Core Scientific has expanded its business beyond Bitcoin mining into the high-growth AI data center space. The company assures investors it will maintain its Bitcoin mining capacity while venturing into HPC hosting.

“As demand for ready, high-power sites continues to outpace supply, we believe Core Scientific is well positioned to meet customer needs with a much shorter time to power than greenfield data center projects,” said Adam Sullivan, CEO of Core Scientific, in a press release.

“Our expanding relationship with CoreWeave creates a pathway for Core Scientific to diversify our business model and balance our portfolio between bitcoin mining and alternative compute hosting, positioning us to maximize cash flow and minimize risk while maintaining our significant exposure to bitcoin’s upside potential,” he noted.

According to Sullivan, Core Scientific is poised to commence modifications to its existing sites to support CoreWeave’s NVIDIA GPU operations, with the project slated to begin in the latter half of 2024 and become operational in early 2025.

As part of the deal, Core Scientific will modify existing facilities to host CoreWeave’s high-performance computing (HPC) systems. This will take place in the second half of 2024 and be operational by the first half of 2025.

Core Scientific claims that since it has a total of 1.2 GW of contracted power, it can allocate nearly 500 MW of power for HPC workloads. Additionally, the firm plans to redeploy some Bitcoin mining capacity to make space for HPC.

As noted in the press release, this agreement has been built on successful prior collaborations between the two entities. Core Scientific previously provided hosting services for CoreWeave from 2019 to 2022. Earlier in March, the two firms extended their partnership, with Core Scientific delivering HPC hosting capacity ahead of schedule.

The news comes almost five months after Core Scientific won court approval to exit bankruptcy, according to Bloomberg.

The firm faced major financial challenges due to the decline in crypto prices and escalating energy costs, which prompted it to reduce the value of its assets and cut 10% of its workforce in August 2022. Later in December, it filed for Chapter 11 bankruptcy protection, citing insufficiency in meeting debt repayments on leased equipment.