Core Scientific Secures $3.5B AI Contract with CoreWeave

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As an analyst with a background in energy and technology, I see this partnership between Core Scientific and CoreWeave as a strategic move that could significantly boost the financial performance of Core Scientific. With the company’s existing 1.2 gigawatts of contracted power capacity, adding 200 MW for HPC operations not only diversifies its revenue streams but also increases its exposure to stable, long-term, and high-margin contracts.

Core Scientific, Inc., a major player in North American Bitcoin mining and hosting services with advanced digital infrastructure, has entered into a 12-year agreement with CoreWeave, the leading AI Hyperscaler company.

I’m an expert in communication and I suggest paraphrasing the announcement as follows:

— Core Scientific (@Core_Scientific) June 4, 2024

Core Scientific is set to provide around 200 MW of facilities for housing CoreWeave’s advanced computing operations. The company plans to adapt several of its own properties to accommodate CoreWeave’s NVIDIA graphics processing units (GPUs). Construction on these sites is projected to begin in the second half of 2024, with completion and readiness for use anticipated in the first half of 2025.

Core Scientific’s collaborations with CoreWeave enhance its existing business strategy by introducing a predicted consistent, recurring, long-term, and high-profit revenue source. Upon completion of roughly 200 MW of HPC (High Performance Computing) infrastructure, the initiative is projected to yield a total cumulative revenue for Core Scientific exceeding $3.5 billion within the first twelve years of the contracts, translating to an average annual revenue of approximately $290 million.

As a crypto investor, I’d interpret this as: I’m excited about Core Scientific’s hosting contracts for High Performance Computing (HPC) since they’ll bring in more stable, dollar-denominated revenue. This revenue growth is expected to boost earnings and ultimately enhance shareholder value. With a total of 1.2 gigawatts of contracted power at its disposal, Core Scientific can provide around 500 MW of HPC power for alternative compute workloads. The strategic placement of these data centers near major cities and fiber lines ensures optimal performance and accessibility.

In April 2024, I analyzed the company’s mining operations and found that we had surpassed the 20 exahash mark in energized hash rate following the completion of scheduling S21 miner deployments and temporarily activating the preceding generation miners at data centers where it was financially viable to do so.

Core Scientific effectively managed its cash flow, enabling the company to pay off a debt of $19 million related to mechanics’ liens and progress with the development of 72 MW worth of infrastructure at its Denton, Texas data center. This initiative is in line with Core Scientific’s expansion plans, aiming to add an additional 372 MW and approximately 20 exahash of hash rate.

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2024-06-04 05:56