Core Scientific, a prominent Bitcoin mining and hosting services provider in North America, has announced a major partnership with AI Hyperscaler CoreWeave that is expected to generate more than $3.5 billion in revenue over a 12-year contract. This collaboration signifies a strategic expansion of Core Scientific’s business model, as it ventures beyond Bitcoin mining to include alternative compute hosting.
The decision to diversify comes in response to the recent Bitcoin halving, which resulted in a 50% reduction in miner rewards. By broadening its revenue streams, Core Scientific aims to minimize risk and enhance cash flow while still benefiting from the potential growth of Bitcoin.
This partnership will entail Core Scientific supplying 200 megawatts of infrastructure, while CoreWeave will finance all necessary capital investments to modify existing sites. The modified infrastructure is expected to be operational by the first half of 2025. In return, CoreWeave will credit Core Scientific approximately $300 million, which will be deducted from their monthly hosting fees. This innovative arrangement demonstrates the commitment of both companies to driving growth and innovation in the compute hosting sector.
As the Bitcoin mining industry faces mounting pressure following the halving, Core Scientific’s foray into alternative compute hosting represents a significant strategic shift. CEO Adam Sullivan emphasizes the importance of diversification in maintaining a competitive advantage. As the industry continues to evolve, partnerships like this one are likely to play an increasingly vital role in shaping the future of compute hosting.