Core Scientific aims for AI growth amid $5B investment

Core Scientific is set to expand its artificial intelligence (AI) capabilities through a significant agreement with CoreWeave, focusing on building a 500-megawatt infrastructure project.

This development comes as the Bitcoin (CRYPTO:BTC) mining landscape faces challenges following the fourth Bitcoin halving in April, which impacted profit margins for many miners.

Russell Cann, Core Scientific’s chief development officer, discussed the multi-billion dollar deal, stating that AI clusters and Bitcoin mining operations have distinct requirements.

Cann emphasised, “AI fleets and Bitcoin mining operations have very different needs,” noting that AI setups are typically more capital-intensive.

The arrangement is projected to generate approximately $8.6 billion in revenue over 12 years, further solidifying Core Scientific’s position in the evolving market.

Cann pointed out that the company had previously ventured into AI in 2019, giving it a head start compared to other miners entering the space later.

“We’re taking advantage of market conditions and expanding our AI piece back again,” he remarked.

The agreement delineates responsibilities between Core Scientific and CoreWeave, with Core Scientific managing the infrastructure development.

Cann noted, “We build our infrastructure, in most cases, from the substation all the way down to the chip itself.”

The costs associated with AI infrastructure are substantially higher than those for Bitcoin mining.

Cann explained, “If I built a world-class air-cooled Bitcoin mining site, I'm going to spend probably between $500,000 to $750,000 per megawatt,” while AI-related GPU costs can escalate to $10 million to $12 million per megawatt.

The new AI facilities are expected to provide enough power for approximately 100,000 homes, with operations commencing in 2025 and 2026.

This pivot reflects Core Scientific’s adaptability in a fast-paced environment, where experience in Bitcoin mining can offer valuable insights for AI infrastructure development.

Cann concluded, “AI is the only thing I've ever seen that iterates as fast as Bitcoin mining.”

At the time of reporting, the Bitcoin price was $67,320.99.