Core Scientific Expands Hosting Contract with CoreWeave to Boost AI Infrastructure

Core Scientific Expands Partnership with CoreWeave: A New Era in AI and Blockchain Computing

On October 22, 2023, Cointelegraph reported a significant development in the world of cryptocurrency and artificial intelligence. Bitcoin miner Core Scientific has announced an extension of its hosting contract with CoreWeave, an artificial intelligence computing firm.

Details of the Expanded Agreement

This revised partnership adds 120 megawatts (MW) of power to CoreWeave's high-performance computing (HPC) operations, bringing the total capacity to a staggering 500 MW across six sites operated by Core Scientific. This move is projected to generate up to $8.7 billion in revenue for Core Scientific over the next twelve years.

Market Reaction and Stock Performance

In response to this positive news, Core Scientific's stock, trading under the ticker CORZ, has seen a notable increase of 5.1%, reaching $13.48 on the Nasdaq exchange.

Infrastructure Modifications and Future Plans

The necessary modifications to accommodate this new capacity are set to begin in the latter half of 2025, with operations expected to kick off in 2026. All capital required for the upgrades to Core Scientific's data centers will be provided by CoreWeave, amounting to $180 million in infrastructure investments, which will be credited against hosting fees.

Long-Term Contract Benefits

The expanded contract also incorporates provisions for two potential five-year renewal terms that could further secure revenue streams for both companies.

CoreWeave's Role as a Specialized Cloud Provider

CoreWeave specializes in cloud infrastructure, focusing on computing solutions tailored for AI, machine learning, and other compute-intensive applications. This partnership will enable CoreWeave to significantly grow its infrastructure capabilities.

Diversifying Revenue Streams Post-Bankruptcy

For Core Scientific, this amended deal serves to broaden its AI services and diversify its revenue streams. This comes as the company recently emerged from bankruptcy, a situation largely influenced by Bitcoin price fluctuations in 2022.

Total Power Capacity Goals

With a total power capacity of 1.2 gigawatts, Core Scientific intends to allocate approximately 700 MW for HPC hosting, while maintaining 500 MW for its Bitcoin mining operations.

Market Insights from Core Scientific

Adam Sullivan, CEO of Core Scientific, highlighted the growing demand for infrastructure to support next-generation compute workloads. He added that the company is actively working to expand power allocations at its existing data centers while also evaluating new sites to create further business opportunities.

Original Partnership Announcement

The partnership between Core Scientific and CoreWeave was first established in June 2024, with a 12-year agreement valued at $3.5 billion. At that time, the infrastructure provided to CoreWeave constituted about 18% of Core Scientific's total operational capacity.

Conclusion

The expansion of the partnership between Core Scientific and CoreWeave signifies a pivotal moment in the intersection of blockchain and AI technology. As both firms continue to evolve and adapt to market demands, their collaboration could reshape the landscape of high-performance computing and cryptocurrency mining.