Core Scientific has entered a 15-year agreement with Advanced Micro Devices (AMD) for AI infrastructure, potentially generating $14 billion in contracted revenue. The deal, announced on Wednesday, involves 529 megawatts of capacity, with AMD having the option to reserve an additional 1.9 gigawatts through 2028, bringing the total capacity to approximately 2.5 gigawatts. This partnership marks a significant shift for Core Scientific, which is transitioning from bitcoin mining to becoming an AI infrastructure provider.
Key Details
The agreement comes after Core Scientific terminated its ASIC agreement with Block and reflects the company's strategic pivot towards AI data centers. The new capacity is expected to support AMD customer deployments starting in 2027. Core Scientific reported that its colocation revenue surged to $136.7 million in the second quarter, up from $10.6 million a year earlier, while digital asset self-mining revenue fell to $21.5 million. This shift indicates a growing focus on long-duration infrastructure contracts tied to AI workloads.
Background
The AMD partnership is seen as a strong validation of Core Scientific's new direction. The company has increased its leased capacity to roughly 1.1 gigawatts, representing over $24 billion in potential revenue. Additionally, AMD has received warrants to purchase up to 30 million shares of Core Scientific at $23.47 per share, further aligning their interests. Despite a positive market reaction to the announcement, Core Scientific's stock remains below key moving averages, indicating that investors are cautious about the execution of this transformation.
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The transition to AI infrastructure could enhance Core Scientific's revenue stability, impacting investor sentiment in the tech and data center sectors. Investors will closely monitor the company's execution of its AI strategy and upcoming financial results. Watch for Core Scientific's next earnings report, which will provide further insight into the impacts of this strategic shift.