Core Scientific Secures Up to $1 Billion From Morgan Stanley for Pivot From Bitcoin Mining to AI

Core Scientific has secured up to $1 billion in financing from Morgan Stanley as it transitions away from Bitcoin mining to focus on building data centers for high-density colocation. The company aims to leverage this financing to expedite project timelines and expand its physical footprint and power capacity for these new data centers.

Financing Details and Strategic Shift

The agreement allows Core Scientific to borrow up to $500 million initially, with the potential for an additional $500 million. This 364-day term financing provides a short-term safety net, enabling the company to aggressively pursue its expansion into servicing technology firms amid the AI boom. CEO Adam Sullivan stated that this capacity will allow them to operate decisively and become a more compelling infrastructure provider.

Transition Away from Bitcoin Mining

Core Scientific's long-term strategy, outlined by Sullivan, involves a complete transition away from Bitcoin mining over the next three years. The company plans to dedicate all available megawatt capacity to servicing the growing demands of technology firms involved in AI. Currently, Core Scientific operates seven facilities in the U.S., with one in Texas already being converted from Bitcoin mining to high-density colocation.

Financial Performance and Market Outlook

The company recently indicated it would likely monetize substantially all of its remaining Bitcoin holdings to fund this transition, having already sold 1,900 Bitcoin for $175 million last month. While the company still generates most of its revenue from Bitcoin mining ($41 million in Q4 sales compared to $31 million for colocation), its stock price has rallied 61% over the past year. Analysts at Compass Point have reaffirmed a “Buy” rating with a $28 per share price target, expressing confidence in Core Scientific’s ability to secure investment-grade customers for its leasable sites.