coinspress.com
In a surprising move, Bitcoin mining giant Core Scientific has secured a monumental $3.5 billion deal with CoreWeave, an AI cloud service provider backed by Nvidia.
This 12-year partnership signals a strategic shift for Core Scientific as they branch out from Bitcoin mining and delve into the red-hot world of artificial intelligence (AI) and high-performance computing (HPC).
The deal involves a major upgrade to Core Scientific’s existing infrastructure. CoreWeave will transform their facilities into cutting-edge data centers specifically designed for the complex demands of AI applications. This move positions Core Scientific to capitalize on the booming AI market, fueled by advancements like OpenAI’s ChatGPT.
The financial terms are particularly enticing for Core Scientific. CoreWeave will cover the initial investments, including a hefty $300 million for infrastructure upgrades. CoreWeave will recoup these costs through hosting fees, reducing risk for Core Scientific and potentially boosting their annual revenue by $290 million. This strategic diversification comes at a crucial time for Core Scientific, who recently emerged from bankruptcy after the 2022 Bitcoin crash.
The agreement also paves the way for future expansion. CoreWeave has the option to increase its footprint within Core Scientific’s facilities, potentially leading to additional contracts and a significant boost to Core Scientific’s capabilities. This move reflects a broader trend within the crypto mining industry. With the rise of AI, many miners, like Bit Digital and Iris Energy, are looking beyond Bitcoin to diversify their revenue streams.
Industry experts point out that while AI requires a larger initial investment, the potential profits far outweigh those of Bitcoin mining. Bitcoin miners, with their high-powered, secure data centers, are ideally positioned to capitalize on this shift.