The current-market session today is witnessing a sharp increase in the stock price of Core Scientific, Inc. (NASDAQ: CORZ) following the announcement of several large, long-term agreements with top artificial intelligence (AI) hyperscaler CoreWeave. As of the last check on the US stock charts, CORZ’s shares surged 31.48% to $6.40 due to the announcement.
Important Deals Set Up Core Science For AI Computing Growth
Under the terms of the agreements, Core Scientific (CORZ) will supply 200 megawatts (MW) or so of data center infrastructure to house CoreWeave’s HPC (high performance computing) activities.
With the new agreements, Core Scientific will be able to capitalize on the expanding AI compute market—one of the most dynamic segments of the technology industry—while continuing to run its well-established bitcoin mining company. Core Scientific is well-positioned to fulfill the demand for powerful data center space with its present infrastructure and shorter lead times than new data center development projects.
Opportunities For Growth And Diversification
Through the cooperation with CoreWeave, Core Scientific can balance its concentration on bitcoin mining with other compute hosting services, diversifying its business model and lowering risk. This strategic move allows Core Scientific to maximize cash flow while maintaining its exposure to the potential upside of bitcoin.
The agreements grant CoreWeave the option to expand its hosting footprint with Core Scientific at additional sites within the next 60 to 90 days. Core Scientific is also engaged in discussions with other potential clients regarding additional HPC hosting contracts, leveraging its extensive portfolio of powered real estate assets.
Core Scientific intends to leverage its position as one of the largest holders of high-power digital infrastructure to deliver long-term value to its shareholders. The agreements stipulate that CoreWeave will fund all capital expenditures required to modify Core Scientific’s existing infrastructure into state-of-the-art HPC data centers.
Notably, CoreWeave will receive credits against hosting payments for an estimated $300 million of the capital investments. The agreements include two optional five-year renewal terms and the possibility of further expansion with additional megawatts at other Core Scientific sites. With this growth, Core Scientific may become one of the biggest data center operators in the country.
