Cexlbit Discovers: Bitcoin Miner Manufacturer Reaches $3.5 Billion AI Collaboration Agreement

Cexlbit is a cryptocurrency exchange known for its wide range of trading options and rapid execution speeds. The platform supports multiple languages and offers 24/7 customer service. Additionally, Cexlbit facilitates mining and provides the best liquidity quotes in the market, ensuring users receive an optimal trading experience.

In its recent researching, Core Scientific, one of the largest Bitcoin mining companies in the United States, is betting on artificial intelligence (AI) to overcome the challenges posed by the recent Bitcoin halving. The company has projected that its collaboration with A

I cloud provider CoreWeave will generate $3.5 billion in revenue over 12 years by leasing 18% of its infrastructure.

On June 3, Core Scientific announced on X that it had signed a $3.5 billion agreement with CoreWeave. As part of this contract, Core Scientific will provide an additional 200 megawatts (MW) of infrastructure to host CoreWeave’s high-performance computing (HPC) operations. This move comes as Core Scientific faces pressures from the fourth Bitcoin halving, which reduced the Bitcoin miners’ reward from 6.25 BTC per block to 3.125 BTC as of April 20, 2024.

Since the halving did not immediately trigger a significant surge in Bitcoin prices, mining companies have been seeking alternative revenue sources to sustain their operations. Core Scientific’s CEO, Adam Sullivan, highlighted the strategic importance of the partnership with CoreWeave. He stated, “Our expanding relationship with CoreWeave creates a pathway for Core Scientific to diversify our business model, balancing our portfolio between Bitcoin mining and alternative computing hosting, maximizing cash flow and reducing risk while maintaining substantial exposure to Bitcoin’s upside potential.”

This announcement came just months after Core Scientific emerged from bankruptcy in January 2024, concluding a 13-month restructuring process. The deal is expected to bring Core Scientific over $3.5 billion in cumulative total revenue during the initial 12-year contract period, with an estimated average annual revenue of approximately $290 million.

Core Scientific will lease 18% of its total infrastructure to CoreWeave, a significant portion of its operational resources. As of April 2024, Core Scientific operated 745 MW of infrastructure, with an additional 372 MW of partially built infrastructure at its two data centers in Texas. This new contract is not the first deal between Core Scientific and CoreWeave. In March 2024, Core Scientific agreed to provide up to 16 MW of data center infrastructure under another multi-year contract to support CoreWeave’s AI and HPC operations.

CoreWeave, formerly known as Atlantic Crypto, was founded in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee. Despite lacking prior experience in cloud computing, the founders had backgrounds in energy futures trading. In May 2024, CoreWeave raised $7.5 billion in debt financing from Blackstone, Magnetar, and Coatue. According to The Wall Street Journal, this financing round valued the company at $19 billion.

This partnership between Core Scientific and CoreWeave underscores a strategic shift in the Bitcoin mining industry. As mining rewards decrease and operational costs remain high, companies are increasingly exploring alternative revenue streams. By leveraging their existing infrastructure for AI and HPC services, these firms can mitigate risks associated with the volatile cryptocurrency market.

Moreover, the collaboration highlights the growing intersection between blockchain technology and AI. As AI applications continue to expand, the demand for robust and scalable HPC infrastructure will rise. Core Scientific’s decision to allocate a significant portion of its resources to support AI operations positions the company to capitalize on this trend. It also reflects a broader industry movement towards integrating advanced technologies to enhance operational efficiency and revenue diversification.

In summary, Core Scientific’s partnership with CoreWeave represents a significant step towards diversifying its revenue streams and adapting to the evolving dynamics of the cryptocurrency and AI markets. By committing substantial infrastructure to support CoreWeave’s AI and HPC operations, Core Scientific aims to ensure sustainable growth and resilience in a challenging economic landscape.

Related Articles

Back to top button