Core Scientific closes $100M deal with CoreWeave as miners diversify cash streams

Bitcoin miner Core Scientific is looking to diversify its revenue streams ahead of the upcoming halving. The company has inked a deal with artificial intelligence startup CoreWeave to provide data center services with more than $100 million in revenue.

Core Scientific will lease a Level 3 data center in Austin, Texas, formerly occupied by Hewlett Packard, to host its CoreWeave infrastructure. Under the deal, the miner will have up to 16 megawatts of generating capacity at its new Austin data center, and will expand its business to include high-performance computing (HPC).

CoreWeave is an AI cloud computing company backed by major Wall Street financial firms, Jane Street, JP Morgan Asset Management and Fidelity. The startup provides infrastructure for computational use cases such as machine learning. In the year At the end of December 2023, the company was valued at $7 billion.

“The new data center in Austin supports CoreWeave's latest requirements and expands and enhances Core Scientific's portfolio of hosting customers in two high-value categories: Bitcoin mining and dedicated GPU cloud computing,” Core Scientific CEO Adam Sullivan said in a statement. .

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The expansion of Core Scientific's service offerings comes a few weeks before the Bitcoin (BTC) halving event, which saw Bitcoin's reward revenue cut in half. The 2024 Bitcoin halving – following the previous ones in 2020, 2016 and 2012 – will see the block reward for miners drop from the current 6.25 BTC per block to 3.125 BTC per block. The purpose of the halving is to control Bitcoin's inflation, by reducing the supply of new coins over time.

While miners may see a significant reduction in income, the costs associated with the activity may increase. According to analysis from CoinShares, electricity costs per Bitcoin pre- and post-halving represent about 68% and 71% of the total cost structure of miners. The average post-halving price of crypto miners is estimated to be $37,856.

In the year In 2023, Core Scientific became the largest publicly listed crypto mining company in North America after mining 19,274 BTC worth $812 million. The miner recently emerged from Chapter 11 bankruptcy in the United States after a 13-month restructuring process to settle $400 million in debts tied to the declining BTC price, rising energy costs and the bankrupt Celsius network.

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