Transforms and Expands Core Scientific’s
Hosting Business and Earnings Power While Maintaining Bitcoin
Mining Capacity and Growth Potential
Long-Term Hosting Agreements Expected to
Generate Total Cumulative Revenue for Core Scientific of More Than
$3.5 Billion During Initial 12-Year Contract Terms
Positions Core Scientific as a Leading Player
in the AI Data Center Space
Core Scientific, Inc. (NASDAQ: CORZ) (“Core Scientific” or the
“Company”), one of the largest owners and operators of high-powered
digital infrastructure for bitcoin mining and hosting services in
North America, today announced the signing of a series of 12-year
contracts with CoreWeave, the AI Hyperscaler.
Under the terms of the agreements, Core Scientific will deliver
approximately 200 megawatts (“MW”) of infrastructure to host
CoreWeave’s high-performance compute (“HPC”) operations. Core
Scientific will modify multiple existing, owned sites to host
CoreWeave’s NVIDIA GPUs. The site modifications are expected to
commence early in the second half of 2024 and achieve operational
status in the first half of 2025.
“Our new contracts with CoreWeave position us to transform our
hosting business and our earnings power by capturing exciting
growth opportunities in AI compute, one of today’s most dynamic
technology segments, while also maintaining our strong bitcoin
mining franchise,” said Adam Sullivan, Core Scientific’s Chief
Executive Officer. “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. 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.”
“The agreements announced today also provide CoreWeave with
options over the next 60 to 90 days to further expand its hosting
footprint with Core Scientific at additional select sites, and we
are continuing discussions with other potential clients regarding
additional HPC hosting contracts to capitalize on our significant
pipeline of powered real estate. We are capitalizing on one of the
largest high-power digital infrastructure portfolios that we will
continually seek to expand to deliver significant, resilient and
sustainable value for our shareholders,” Mr. Sullivan added.
Per the agreements, all capital investments required to modify
Core Scientific’s existing infrastructure into cutting-edge,
application-specific data centers customized for dense HPC will be
funded by CoreWeave. An estimated $300 million of the capital
investments associated with Core Scientific-owned infrastructure
will be credited against hosting payments at no more than 50% of
monthly fees until fully repaid. The agreements with CoreWeave
provide opportunities for two renewal terms of five years each. The
agreements also provide optionality for further expansion with
meaningful additional megawatts at other Core Scientific sites,
potentially ranking Core Scientific as one of the largest data
center operators in the United States.
Core Scientific’s agreements with CoreWeave complement its
current business model with the addition of an expected stable,
recurring, long-term and high margin revenue stream. Moving
forward, the new HPC hosting contracts will increase Core
Scientific’s exposure to contracted, dollar-denominated revenue.
Once the approximately 200 MW of HPC infrastructure is operational,
the project is estimated to generate total cumulative revenue for
Core Scientific of over $3.5 billion during the initial 12-year
terms of the contracts.1 Estimated average annual revenue from the
contracts is expected to be approximately $290 million. From
revenue to gross margin, this is expected to enhance earnings power
and drive shareholder value.
From 2019 to 2022, Core Scientific hosted thousands of
CoreWeave’s GPUs in its data centers. In March of 2024, Core
Scientific and CoreWeave entered a contract for HPC hosting at Core
Scientific’s new Austin data center, with Core Scientific
delivering 16 MW of capacity more than 30 days ahead of
schedule.
With its total of 1.2 gigawatts of contracted power, Core
Scientific is able to deliver nearly 500 MW of HPC power to be used
for alternative compute workloads based on geographic proximity to
major cities and fiber lines. 2
In connection with this expansion of Core Scientific’s HPC
hosting strategy, Core Scientific intends to redeploy certain of
its bitcoin mining capacity from designated HPC sites to other of
its dedicated bitcoin mining sites to support business continuity
and growth.
Advisors
Moelis & Company LLC is acting as financial advisor to Core
Scientific. Sidley Austin LLP is acting as legal advisor to Core
Scientific.
About Core Scientific
Core Scientific is one of the largest owners and operators of
high-powered digital infrastructure for bitcoin mining and hosting
services in North America. Transforming energy into high value
compute with superior efficiency at scale, we employ our own large
fleet of computers (“miners”) to earn bitcoin for our own account
and provide hosting services for large bitcoin mining and
high-performance computing customers at our eight operational data
centers in Georgia (2), Kentucky (1), North Carolina (1), North
Dakota (1) and Texas (3). We derive the majority of our revenue
from earning bitcoin for our own account (“self-mining”). To learn
more, visit www.corescientific.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by the use of
words such as “aim,” “estimate,” “plan,” “project,” “forecast,”
“opportunity,” “goal,” “intend,” “will,” “expect,” “anticipate,”
“believe,” “seek,” “target,” “potential,” “hope” or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. These statements
include, but are not limited, statements regarding potential
benefits of or expectations regarding the strategic relationship,
agreements and contemplated transactions with CoreWeave, impacts on
the Company’s financial and operating results, completion and
timing of certain events, impacts on the Company’s trading multiple
and ability to deliver shareholder value, the Company’s intention
and ability to capitalize on additional or related opportunities,
and the Company’s plans, objectives, expectations and intentions.
The Company’s actual results may differ materially from those
anticipated in these forward-looking statements as a result of
certain risks and other factors, which could include, but are not
limited to, unanticipated difficulties or expenditures relating to
the strategic relationship, agreements and contemplated
transactions with CoreWeave; the possibility that the anticipated
financial and operational benefits of the strategic relationship,
agreements and contemplated transactions and additional
opportunities are not realized when expected or at all; disruptions
of current plans and operations caused by the announcement and
execution of the strategic relationship, agreements and
contemplated transactions; diversion of management’s attention from
ongoing business operations and opportunities; potential adverse
reactions or changes to business, regulatory or employee
relationships, including those resulting from the announcement or
execution of the strategic relationship, agreements and
contemplated transactions; unexpected risks or the materialization
of risks that are greater than anticipated; occurrence of any
event, change or other circumstance that could give rise to the
termination of the contracts with CoreWeave; delays in required
approvals; the availability of government incentives; and legal
proceedings, judgments or settlements in connection with the
strategic relationship, agreements and contemplated transactions,
as well as other risk factors set forth in the Company’s Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with
the Securities and Exchange Commission.
These statements are provided for illustrative purposes only and
are based on various assumptions, whether or not identified in this
press release, and on the current expectations of the Company’s
management. These forward-looking statements are not intended to
serve, and must not be relied on by any investor, as a guarantee,
an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of the Company.
These forward-looking statements are subject to a number of risks
and uncertainties, including those identified in the Company’s
reports filed with the Securities and Exchange Commission, and if
any of these risks materialize or our assumptions prove incorrect,
actual results could differ materially from the results implied by
these forward-looking statements. Accordingly, undue reliance
should not be placed upon the forward-looking statements. The
Company does not assume any duty or obligation (and does not
undertake) to update or supplement any forward-looking
statements.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure. For further
information regarding the Company’s definition of, and additional
information related to, non-GAAP financial measures, see “Key
Business Metrics and Non-GAAP Financial Measures” in the Company’s
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission.
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__________________________ 1 Represents total cumulative revenue
over all 12-year contract periods, before prepaid build out costs.
2 500 MW of HPC power represents 700 MW of gross contracted
power.
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version on businesswire.com: https://www.businesswire.com/news/home/20240603752657/en/
Core Scientific
Investors: ir@corescientific.com
Media: press@corescientific.com
Joseph Sala / Mahmoud Siddig Joele Frank, Wilkinson Brimmer
Katcher (212) 355-4449
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