Core Scientific, a prominent Bitcoin mining and hosting services provider in North America, has announced a significant partnership with AI Hyperscaler CoreWeave. This 12-year contract is projected to generate more than $3.5 billion in revenue, marking a significant milestone for both companies.
The agreement signifies a strategic diversification of Core Scientific’s business model, expanding its services beyond Bitcoin mining to encompass alternative compute hosting. This decision is seen 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.
This partnership will involve Core Scientific providing 200 megawatts of infrastructure, with CoreWeave funding all necessary capital investments to modify existing sites. The modified infrastructure is expected to be fully operational by the first half of 2025. In return, CoreWeave will credit Core Scientific an estimated $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 industry.
With the Bitcoin mining sector facing increased challenges following the halving, Core Scientific’s expansion into alternative compute hosting signifies a significant shift in strategy. Adam Sullivan, the CEO of the company, emphasized the importance of diversification in maintaining a competitive advantage. As the industry continues to evolve, partnerships like this one are expected to play an increasingly vital role in shaping the future of compute hosting.
Tags: BTC
