Core Scientific and CoreWeave Partnership in AI for $3.5 billion
Date: 2024-06-04 Author: Gabriel Deangelo Categories: BUSINESS
Bitcoin miner Core Scientific has entered into a large-scale agreement with CoreWeave, a company specializing in artificial intelligence (AI) technologies. The 12-year partnership will provide computing power for AI services. The transaction amount is estimated at $3.5 billion.
Agreement Details
Core Scientific will provide CoreWeave with 200 MW of infrastructure to support the operation of its AI products. This partnership is expected to generate significant revenue for the mining company, which will be an important step in diversifying its business model.
Management Statement
Adam Sullivan, CEO of Core Scientific, noted: “Expanding our relationship with CoreWeave creates an opportunity for us to diversify our business model and balance our portfolio between mining and alternative computing hosting. This will maximize cash flow and minimize risk, while maintaining significant exposure to the potential growth of Bitcoin.” .
As part of the agreement, Core Scientific will renovate some of its facilities. The process involves the introduction of NVIDIA GPUs, which will optimize the infrastructure for AI computing. The renovation will begin in the second half of 2024 and all changes will be funded by CoreWeave. We are talking about capital investments in infrastructure in the amount of $300 million, which will be counted against payments for hosting.
Expansion Potential
The agreement also provides for the possibility of expanding the provided capacity by connecting other Core Scientific facilities. The company aims to further develop hosting services and attract new clients, which will increase revenues and improve its position in the market.
Currently, Core Scientific has a total capacity of 1.2 GW. Much of this infrastructure is still dedicated to Bitcoin mining, but the new partnership will allow the company to expand its reach to include alternative computing services.
Strategic Plans
Earlier it became known that Core Scientific intends to buy up the equipment of problematic miners after the halving. For this purpose, the company accumulates cash on its balance sheet, which also emphasizes its strategic focus on long-term growth and business diversification.
Core Scientific's $3.5 billion AI partnership with CoreWeave opens up new horizons for both companies. It allows a mining company to diversify its activities, increase income and minimize risks. This agreement is a significant step in Core Scientific's development and confirms its commitment to innovation and expansion of its capabilities in the market.
