Core Scientific, a bankrupt Bitcoin miner, partners with AI company for $6.7 billion in just eight months.

• Core Scientific, a Bitcoin miner, announced plans to expand its AI business through a partnership with cloud provider CoreWeave.
• Over the course of 12 years, the deal is projected to generate $6.7 billion in revenue.
• Numerous bitcoin mining companies are repurposing existing structures to cater to AI customers as profits from cryptocurrency mining decline.

Since its return to the stock market in January, Core Scientific's share price has increased by 140% as the company focuses on expanding its business in artificial intelligence.

Core Scientific will provide an additional 112 megawatts of computing infrastructure to support CoreWeave's operations, as announced by the mining firm on Tuesday in an expanded deal worth $6.7 billion with Nvidia-backed startup CoreWeave.

Core Scientific expects to generate an additional $2 billion in revenue over 12 years, on top of an existing arrangement that's expected to bring in $4.7 billion. In total, the company plans to provide about 382 megawatts of infrastructure to CoreWeave by the first half of 2026, with the possibility of adding 118 megawatts at other Core Scientific sites.

The second half of 2024 is when modifications are expected to start, with full operation achieved by the first half of 2026.

Since our inception in January, we have experienced significant growth and have been intensely focused on creating top-notch digital infrastructure, according to Core Scientific CEO Adam Sullivan, who spoke to CNBC. This infrastructure advantage has enabled us to expand our revenue streams and repurpose certain facilities to meet the growing demand for the technology necessary for AI.

Bitcoin miners have been moving into the AI infrastructure business for months due to the decreased profitability of mining after the April halving. These companies had already invested in data centers that could be repurposed to serve a new customer base.

The process of converting to AI is not straightforward, as it involves different requirements and data network needs.

In a May report, Needham analysts stated that almost all existing infrastructure used by miners would need to be completely demolished and rebuilt to support high-performance computing.

In June, Core Scientific's Sullivan was among the mining executives who met with former President Trump in a private roundtable to discuss the intersection of bitcoin mining and AI.

On June 15, the combined market capitalization of the 14 major U.S.-listed bitcoin miners tracked by JPMorgan reached a record high of $22.8 billion, according to a JPMorgan note.

In June, Bit Digital, a bitcoin miner that generates 27% of its revenue from AI, announced an agreement with a customer to supply Nvidia GPUs for three years at a data center in Iceland. This deal is expected to generate $92 million in annual revenue. To finance the purchase of the GPUs, Bit Digital will liquidate some of its crypto holdings.

In June, Hut 8, a Miami-based company, announced that it had obtained $150 million in debt from private equity firm Coatue to expand its AI data center portfolio.

On Monday, Core Scientific experienced a 7.5% decline as global stocks plummeted, affecting both cryptocurrency prices and AI companies. Cantor Fitzgerald analysts view the sell-off as a buying opportunity for publicly traded mining stocks.

In June, CoreWeave proposed to purchase Core Scientific for $1.02 billion, shortly after their initial agreement. However, Core Scientific declined the offer. Currently, Core Scientific is valued at approximately $1.5 billion.

The increasing trend of bitcoin miners relocating to AI is being fueled by a new multibillion-dollar deal.