tl;dr

Core Scientific has entered a $3.5 billion, 12-year partnership with CoreWeave, a Nvidia-backed cloud service provider, marking a shift from Bitcoin mining to high-performance computing (HPC) and machine learning. This collaboration will enhance Core Scientific's infrastructure for AI applications, ...

Core Scientific has announced a $3.5 billion, 12-year contract with the Nvidia-backed cloud service provider – CoreWeave. This significant partnership marks a strategic shift for Core Scientific as it ventures beyond Bitcoin mining into high-performance computing (HPC) and machine learning. CoreWeave will also enhance Core Scientific’s existing infrastructure, making it apt for complex artificial intelligence (AI) applications.

This deal expands upon a pre-existing collaboration between the two firms. It aims to retrofit Core Scientific’s facilities into cutting-edge, application-specific data centers. These enhancements are crucial for advanced computing tasks that modern AI technologies demand. Under the partnership’s financial terms, CoreWeave will handle all initial capital investments, including a significant $300 million allocated to infrastructure upgrades. These investments will be strategically recouped through hosting fees, providing financial relief and reducing risk exposure.

With estimated annual revenues of around $290 million from the contracts, Core Scientific anticipates a significant boost in earnings, enhancing shareholder value. Meanwhile, Core Scientific stock has been up by 40% year-to-date. CEO Adam Sullivan highlighted the strategic foresight of this diversification.

The timing of this deal is pivotal, given Core Scientific’s recent emergence from bankruptcy prompted by the 2022 Bitcoin market collapse. Under Sullivan’s leadership, the company has navigated past financial challenges by restructuring debt and pivoting towards more sustainable business avenues. Moreover, the agreement includes options for further expansion, allowing CoreWeave to increase its operational capacity at Core Scientific’s locations. These ongoing negotiations aim to secure additional contracts that would significantly boost Core Scientific’s capabilities.

The shift towards AI and HPC hosting is driven by the increasing demand for AI infrastructure, sparked by groundbreaking technologies such as OpenAI’s ChatGPT. This surge has sparked a flurry of investments across the sector, with many companies, including Core Scientific’s peers such as Bit Digital, Iris Energy, and Hut 8, diversifying their revenue streams beyond traditional Bitcoin mining.

Industry experts affirm that AI operations require greater capital investment but also yield higher profits than Bitcoin mining. James Butterfill, Head of Research at CoinShares, noted the strategic advantage for Bitcoin miners. “Bitcoin miners, often stationed in energy-secure and energy-intensive data centers, find these facilities ideal for AI operations as well,” Butterfill said.

More about GameStop Corp

GameStop Corp Technical Analysis Summary

Company: GameStop Corp

Headquarters: Grapevine, Texas

Sector: Trade & Services

Industry: Retail-Computer & Computer Software Stores

Market Cap: $10.42 billion

Current Price: $1483.5

Dividend Yield: None

Price/Earnings Ratio: 0.02

EPS: 17.28

Beta: 0.0013

Volume: 5,272,800,000

Revenue: $6.38 billion

Operating Margin: 25.9%

Net Margin: -19.4%

More about C3 Ai Inc

C3 Ai Inc (C3)

Industry: Technology

Sector: Services-Prepackaged Software

Revenue: $3,657,986,000

Net Income: -$2.34 per share

EPS: $2.602

Dividend Yield: -0.901%

Market Cap: $310,582,000

Stock Price: $29.82

PE Ratio: 0

Beta: 0.196

Disclaimer

The opinions expressed by the writers at Grow My Bag are their own and do not reflect the official stance of Grow My Bag. The content provided on our site is not intended as investment advice, and Grow My Bag is not an investment advisor. We do not endorse buying or selling any cryptocurrencies or digital assets mentioned in our articles. High-risk investments in Bitcoin, cryptocurrencies, and digital assets require thorough due diligence, and all transfers and trades made are at your own risk. Grow My Bag is not responsible for any potential losses and participates in affiliate marketing.
 13 Nov 24
 13 Nov 24
 13 Nov 24