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Bitcoin Miner Core Scientific Shares Spike After Signing $2B of Additional Computing Contract

Aug 5, 2024
  • Core Scientific’s shares surged as much as 17% on a new deal with CoreWeave.
  • The miner now expects to generate a total of $6.7 billion in revenue over the life of the contract, starting in the first half of 2026.

As a seasoned crypto investor with a knack for recognizing promising opportunities, I find the surge in Core Scientific’s shares following their new deal with CoreWeave to be quite intriguing. With a total revenue potential of $6.7 billion over the life of this contract, it seems that the miner is poised to ride the wave of high-performance computing demand.

On Tuesday, Core Scientific’s bitcoin miner stocks jumped up to 17%, standing out among other crypto-related stocks. This surge was triggered by the company extending their existing high-performance computing (HPC) agreement with CoreWeave, a move that boosted investor confidence.

In a released announcement, the miner declared that they’ve chosen to utilize an option from an earlier agreement to accommodate approximately 112 megawatts (MW) of extra GPUs for AI technology powerhouse, CoreWeave. This new deal is projected to generate around $2 billion in extra income, raising their total earnings to roughly $6.7 billion, with operations commencing in the first half of 2026. CoreWeave will be responsible for funding all necessary capital investments to prepare Core Scientific’s existing mining facilities for high-performance computing (HPC). The statement further explained this point.

Adam Sullivan, CEO of Core Scientific, stated that we have recently secured a contract with CoreWeave for 382 megawatts of HPC (High Performance Computing) infrastructure. This underscores the robust demand for powerful data center infrastructure and our team’s exceptional capability to provide it effectively.

Initially, the miner agreed to offer hosting infrastructure for 200 megawatts of GPUs for CoreWeave, and they also discussed the possibility of increasing capacity. Later on, both companies decided to increase the agreement by an additional 70 megawatts, which represents a third expansion of their original deal.

Revitalizing the spotlight, the initial agreement rejuvenated the mining sector that had been adversely affected during the harsh crypto winter and suffered from diminished profits following the latest halving event.

Companies specializing in High Performance Computing (HPC) and Artificial Intelligence (AI) often need energy-demanding facilities, which can be costly and time-consuming to establish. On the other hand, Bitcoin miners, who have already secured power agreements and established infrastructure, present a more convenient option for hosting HPC and AI equipment. This is because it’s less complex than constructing new facilities from scratch or relying on outdated data centers.

Leveraging this market opening, Core Scientific announced they can expand their contract to accommodate an extra 118MW of high-performance computing machinery by option.

According to Sullivan, the newest agreement confirms that our plan for creating data centers tailored for applications matches the rising demand for greater energy density in high-performance computing, a need that traditional data centers often fail to meet.

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2024-08-06 20:17