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Core Scientific Plans $3.3B Debt Raise to Expand AI Data Centers

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Core Scientific Plans $3.3B Debt Raise to Expand AI Data Centers

Core Scientific is seeking to raise $3.3 billion in debt to support its expanding data center operations across the United States, as crypto miners increasingly pivot toward high-performance computing and artificial intelligence workloads amid tighter conditions in the mining sector.

The financing will come through senior secured notes due in 2031, the company disclosed Tuesday. The notes will be backed by Core Scientific’s assets, giving investors priority claims in the event of default. Unlike an equity raise, the offering allows the company to access capital without diluting existing shareholders.

Proceeds from the offering are expected to fund ongoing data center development and refinance existing short-term debt. 

In particular, Core Scientific plans to repay borrowings under its 364-day credit facility, effectively extending its debt maturities as it scales infrastructure. The company has identified expansion projects in Georgia, Texas, North Carolina and Oklahoma.

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The proposed raise follows a separate $1 billion credit agreement with Morgan Stanley announced in March, underscoring Core Scientific’s push to secure long-term financing for its data center buildout.

Core Scientific (CORZ) shares were little changed in early Tuesday trading, extending a year-to-date rally of more than 37%. Source: Yahoo Finance

Core Scientific is among several crypto miners that have turned to leverage to expand beyond traditional bitcoin mining, particularly into high-performance computing and AI-focused data center services. Peers, including MARA Holdings, Riot Platforms and Hut 8 have pursued similar strategies, investing in infrastructure and partnerships to diversify revenue streams.

Meanwhile, IREN has pursued one of the most aggressive expansion strategies in the sector, spending roughly $800 million on data centers and related infrastructure in its most recent quarter.

Related: CoreWeave shows how crypto-era infrastructure quietly became AI’s backbone

Mining industry turns to partnerships

The crypto mining industry is increasingly turning to partnerships to finance and expand its footprint in AI and data center workloads. 

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On Tuesday, Soluna Holdings, a publicly traded developer of renewable-powered data centers, announced an expanded partnership with Bitcoin mining infrastructure provider Blockware. The deal is expected to add 3.3 megawatts of capacity at Soluna’s West Texas colocation facility, which primarily hosts third-party mining operations.

The agreement marks Blockware’s fourth expansion with Soluna.

As Cointelegraph recently reported, Soluna is also expanding into AI workloads, including a $53 million investment in a wind farm to support those operations as mining revenues come under pressure.

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Related: Aluminum giant Alcoa to sell dormant smelter to Bitcoin miner NYDIG: Report

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

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Crypto World

US Admiral Touts Bitcoin a Tool For US Power Projection

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US Admiral Touts Bitcoin a Tool For US Power Projection

A senior US military commander has lauded Bitcoin as a “valuable computer science tool,” arguing its usefulness extends beyond monetary applications and can support US national security interests.

“It is a valuable computer science tool, as a power projection,” Admiral Samuel Paparo said at a Senate Armed Services Committee hearing on Tuesday, adding that Bitcoin’s proof-of-work technology “imposes more cost” on attackers attempting to compromise the network:

“Outside of the economic formulation of it, it has got really important computer science applications for cybersecurity.”

The Senate hearing looked into the strategic posture of US forces in Indo-Pacific, including ongoing conflicts in Ukraine and the Middle East, China’s military expansion and coordination with foreign adversaries, and threats from North Korea.

Admiral Samuel Paparo at the Senate Armed Services Committee hearing on Tuesday. Source: US Senate Committee on Armed Services

Paparo’s remarks echo similar comments from US Space Force member Jason Lowery in December 2023, who said Bitcoin and other proof-of-work blockchains could protect the US in cyberwarfare.

At the time, he said that while Bitcoin is mostly seen as a “monetary system” to secure funds, few know that Bitcoin can be used to secure “all forms of data, messages or command signals.”

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“As a result, this misconception underplays the technology’s broad strategic significance for cybersecurity, and consequently, national security.”

Research into Bitcoin’s use as a cybersecurity tool comes as many adversaries — including state-linked actors — have turned to cyberattacks such as phishing, ransomware and distributed denial-of-service to sabotage infrastructure and secure economic advantages.

North Korea’s notorious Lazarus Group is one of the most notable examples of this, having stolen billions of dollars in crypto over the past decade to support its nuclear program.

Paparo’s comments came in response to a question from US Senator Tommy Tuberville, who asked how the US and Congress can lead on Bitcoin competition, noting that China’s top monetary think tank now also views Bitcoin as a strategic asset.

Paparo didn’t address the question directly but added, “Bitcoin is a reality. It is a peer-to-peer zero-trust transfer of value. Anything that supports all instruments of national power for the United States of America is to the good.”

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Senators introduce national security-focused Bitcoin bill

The US holds the largest Bitcoin reserves among nation-states and holds the largest share of Bitcoin hashrate. However, it remains reliant on foreign-manufactured mining equipment, an issue that has raised national security concerns related to supply chain risks.

Related: Quantum threat to Bitcoin still years away, says Borderless Capital partner

Last month, US Senators Bill Cassidy and Cynthia Lummis introduced the Mined in America Act to resolve that issue by bringing more Bitcoin mining manufacturing back to the US. 

It also seeks to codify Trump’s executive order establishing the Strategic Bitcoin Reserve.

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Magazine: Adam Back says current demand is ‘almost’ enough to send Bitcoin to $1M