Core Scientific Inc. (CORZ), one of the world’s largest Bitcoin mining companies, has experienced a remarkable turnaround in 2024. After exiting Chapter 11 bankruptcy in January and relisted its shares on Wall Street, the company’s stock has soared by nearly 260%. This resurgence can be attributed to the recovery of Bitcoin’s price, which had plummeted to $16,000 when Core Scientific filed for bankruptcy in December 2022.
Since then, the company has strategically shifted its focus to high-performance computing (HPC) services, catering to the burgeoning demand for data centers in the artificial intelligence (AI) sector. Benzinga spoke with Core Scientific’s CEO, Adam Sullivan, to gain insights into the company’s strategy and the evolving landscape of the U.S. tech industry.
Sullivan acknowledged the challenges faced by the Bitcoin mining industry, particularly after the April halving event that reduced block rewards, a primary source of mining revenue, by 50%. He highlighted the company’s post-halving strategy, which prioritizes hash price, local power costs, and environmental considerations to optimize fleet performance and profitability. “We conducted extensive scenario analysis to understand the impact of different hash price assumptions on our business,” Sullivan said.
Core Scientific’s HPC strategy, developed over the past 18 months, capitalized on the growing demand for high-power data centers. Sullivan described the AI business as a “predictable, long-term, and profitable revenue stream” in contrast to the volatile nature of Bitcoin mining.
In June, Core Scientific secured a 12-year contract with Nvidia-backed cloud provider CoreWeave to supply infrastructure for AI applications. This deal positions Core Scientific as a major player in the U.S. data center market, with projected revenue of $6.7 billion.
Beyond its AI ventures, Core Scientific has made strategic moves in the Bitcoin mining space. The company has garnered support from Republican presidential candidate Donald Trump, who advocates for all remaining Bitcoins to be mined in the U.S. Sullivan welcomed this support, emphasizing the significance of Bitcoin and AI as crucial technologies that the U.S. should nurture for global leadership.
Furthermore, Core Scientific recently purchased mining chips from Jack Dorsey’s Block Inc. (SQ), marking a departure from its previous reliance on Bitmain, the China-based industry leader. Sullivan stated, “We believe the new Block ASIC chips will improve our mining economics in terms of initial capital expenditures, ongoing maintenance, and performance.” This move reflects the growing capabilities of U.S. chip manufacturers, and Sullivan believes strong government support will pave the way for future success.
These insights provide a glimpse into the evolving strategies of Core Scientific and the broader digital asset landscape, setting the stage for further discussions at the upcoming Benzinga Future of Digital Assets event on November 19.
