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 anticipated to generate more than $3.5 billion in revenue over a 12-year period, signifying a significant milestone for both companies.
The agreement represents a strategic expansion of Core Scientific’s business model, as it ventures beyond Bitcoin mining and enters the realm of alternative compute hosting. This decision comes in response to the recent Bitcoin halving, which led to a 50% reduction in miner rewards. By diversifying its revenue streams, Core Scientific aims to mitigate risks, optimize cash flow, and still benefit from the potential growth of Bitcoin.
This partnership will involve Core Scientific providing 200 megawatts of infrastructure, with CoreWeave financing the necessary capital investments to modify existing sites. The revamped infrastructure is expected to be fully operational by the first half of 2025. In exchange for their contributions, CoreWeave will credit Core Scientific with an estimated $300 million, which will be deducted from their monthly hosting fees. This unique arrangement exemplifies the commitment of both companies to driving growth and innovation in the compute hosting industry.
With the Bitcoin mining sector facing mounting challenges following the halving, Core Scientific’s foray into alternative compute hosting marks 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 such as this one are likely to play an increasingly pivotal role in shaping the future of compute hosting.
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