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Core Scientific Is Uniquely Placed to Deliver AI Data Center Scale in the Near Term: Bernstein

Sep 9, 2024
    Core Scientific is uniquely positioned to deliver AI data center scale in the one-to-three year timeframe, the report said.Bernstein said legacy data centers can provide equivalent scale, but not in the same timeframe.The broker has an outperform rating on Core Scientific with a $17 price target.
As a seasoned crypto investor with a knack for spotting opportunities in the burgeoning blockchain and AI sectors, I find the recent developments at Core Scientific (CORZ) particularly intriguing. Having navigated through numerous market cycles and witnessed the rapid evolution of tech companies, I can confidently say that Core Scientific’s strategic alliance with CoreWeave is a game-changer.CoreScientific (CORZ), the bitcoin miner that recently secured a 200-megawatt AI agreement with CoreWeave in June, is well-equipped to increase its capacity to as much as 300 megawatts within the next three years, according to a research report by broker Bernstein after a discussion with CEO Adam Sullivan.

According to analysts headed by Gautam Chhugani, the company enjoys several advantages such as easy access to suitable sites and power, reduced competition within the data center market for the next 1-3 years, and the capacity to assemble a robust pool of skilled data center personnel.

As a forward-thinking cryptocurrency investor, I’ve noticed that traditional data centers can match the scale, but they require more time to achieve this goal. However, for me, it’s all about swift execution and rapid market entry in the AI race, as highlighted by the report authors.
Due to an escalating need for computer power, AI companies are encountering a predicament: Although they’re receiving substantial investments, they struggle to access infrastructure quickly enough to accommodate their burgeoning computing requirements. In contrast, Bitcoin miners have immediate access to the necessary sites and energy resources. The 12-year partnership between Core Scientific and CoreWeave highlights a growing trend among AI firms teaming up with Bitcoin miners.

The broker pointed out that certain investors expressed worries regarding potential counterparty risks between Core Scientific and CoreWeave due to the agreement, as well as the dangers of an overbuild financed by debt.

The report states that there are significantly wider risks associated with the AI loop, and investing in CORZ implies assuming the risk of underwriting CoreWeave’s operations.

According to Bernstein, they recommend that Core Scientific’s stock performs better than average, setting a predicted price of $17 per share. At the time of publishing, the stock was roughly stable, hovering around $10.

Bitcoin mining companies are finding it beneficial to collaborate with private equity firms for artificial intelligence computing, as Core has done with its CoreWeave agreement, according to their CEO during an exclusive interview with CoinDesk.

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2024-09-10 18:28