Core Scientific, a prominent Bitcoin mining and hosting services provider in North America, has announced a major partnership with AI Hyperscaler CoreWeave. This partnership is expected to generate more than $3.5 billion in revenue over a 12-year period, representing a significant milestone for both companies.
The agreement signifies a strategic expansion of Core Scientific’s business model, as it moves beyond Bitcoin mining to include alternative compute hosting services. This decision comes as a response to the recent Bitcoin halving, which resulted in a 50% reduction in miner rewards. By diversifying its revenue streams, Core Scientific aims to minimize risk and maximize cash flow, while still benefiting from the potential growth of Bitcoin.
Under the partnership, Core Scientific will provide 200 megawatts of infrastructure, while CoreWeave will fund the necessary capital investments to modify existing sites. The modified infrastructure is expected to be operational by the first half of 2025. As part of the agreement, CoreWeave will credit Core Scientific with an estimated $300 million, which will be deducted from their monthly hosting fees. This unique arrangement showcases the commitment of both companies to driving growth and innovation in the compute hosting industry.
With the Bitcoin mining sector facing increasing challenges after the halving, Core Scientific’s expansion 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 a crucial role in shaping the future of compute hosting.
Tags: BTC