Core Scientific, a prominent Bitcoin mining and hosting services provider in North America, has announced a groundbreaking partnership with AI Hyperscaler CoreWeave. This partnership, which spans over 12 years, is projected to generate more than $3.5 billion in revenue, signifying a major milestone for both companies.
The agreement signifies a strategic diversification for Core Scientific, expanding its business model beyond Bitcoin mining to include alternative compute hosting. This strategic move is a response to the recent Bitcoin halving, which resulted in a 50% reduction in miner rewards. By diversifying its revenue sources, Core Scientific aims to minimize risk and maximize cash flow while still benefiting from the potential growth of Bitcoin.
This partnership will involve Core Scientific providing 200 megawatts of infrastructure, with CoreWeave financing all necessary capital investments to modify existing sites. The modified infrastructure is expected to be fully operational by the first half of 2025. As part of the agreement, CoreWeave will credit Core Scientific approximately $300 million, which will be deducted from their monthly hosting fees. This innovative arrangement showcases the commitment of both companies to driving growth and innovation in the compute hosting sector.
With the Bitcoin mining industry facing mounting pressure after the halving, Core Scientific’s foray into alternative compute hosting represents a significant strategic shift. Adam Sullivan, the CEO of Core Scientific, emphasized 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 pivotal role in shaping the future of compute hosting.
Tags: BTC