Core Scientific has received approval for $600 million in credit lines, which will be used to develop its business in the field of artificial intelligence infrastructure. This financing includes a $100 million revolving credit facility and a $500 million letter of credit.
The company stated that these financial instruments will increase capital efficiency and provide additional flexibility for future projects. This funding comes as Core Scientific reorients its infrastructure towards high-density equipment placement (colocation) and AI-related workloads.
Core Scientific is increasingly positioning itself as a provider of digital infrastructure for high-performance computing and artificial intelligence. Its data centers are designed to serve clients with high computational power requirements, offering high-density colocation services.
The company's operations cover data centers in Alabama, Georgia, Kentucky, North Carolina, North Dakota, Oklahoma, and Texas. Furthermore, the company is repurposing remaining cryptocurrency mining facilities for high-density colocation where feasible.
As part of a strategic shift away from Bitcoin mining, which was previously a central element of the business, Core Scientific filed for Chapter 11 bankruptcy in December 2022. Since then, as of January 2024, the company has emerged from the crisis with a reorganized balance sheet.
As demand for AI computing power grows, Core Scientific is implementing several major infrastructure projects. The company recently announced plans to expand its Muskogee, Oklahoma campus to a capacity of 1.5 gigawatts. It is also undertaking a major expansion in Pecos, Texas, and exploring additional opportunities within its existing infrastructure. An infrastructure partnership with AMD could provide up to 2.5 gigawatts of data center capacity for AI applications and high-performance computing.
According to Core Scientific's CFO, Jim Nighard, the financing is expected to free up approximately $300 million in committed funds. These funds will help the company improve its ability to finance working capital and execute infrastructure opportunities.
The revolving credit facility has a three-year maturity and is intended for general corporate purposes. Loans will bear interest at the Adjusted Term SOFR plus 1.75% or an alternative base rate plus 0.75%. The $500 million letter of credit will support obligations for specific projects in accordance with utility agreements. The letters of credit will carry an annual fee of 1.75% and an upfront fee of 0.125%.
Morgan Stanley Senior Funding acted as the lead arranger and joint bookrunner in this transaction. JPMorgan Chase serves as the Administrative Agent, Security Agent, Joint Lead Arranger, and Joint Bookrunner. Goldman Sachs and TD Securities also participated as Joint Lead Arrangers and Joint Bookrunners. The commitments are expected to be distributed equally among Morgan Stanley, JPMorgan Chase, Goldman Sachs, and TD Securities.
These credit lines are secured by a first-priority lien on virtually all of Core Scientific's assets and those of several of its guarantor subsidiaries. The financing structure aims to enhance the company's liquidity during its strategic transition to providing infrastructure and services for the large AI computing market.
Core Scientific's latest move also underscores a broader trend among infrastructure providers toward AI and high-performance computing. With the expected inflow of approximately $300 million in committed funds, the company gains greater operational freedom to expand, strengthening its position in the growing AI data center market.
