Core Scientific (NASDAQ: CORZ) stock soared during intraday trading Tuesday after announcing a new hosting deal with AI hyperscaler CoreWeave.
Core Scientific recently announced a series of 12-year contracts signed with CoreWeave, the AI Hyperscaler, marking a significant foray into the high-performance computing (HPC) hosting space.
Under these agreements, Core Scientific will provide approximately 200 megawatts of infrastructure to accommodate CoreWeave’s HPC operations, predominantly focused on hosting NVIDIA GPUs. The company plans to modify several existing owned sites to facilitate CoreWeave’s computing needs, with site modifications slated to begin in the early second half of 2024 and achieve operational status by the first half of 2025.
Once operational, Core Scientific forecasts that the project will yield total cumulative revenue exceeding $3.5 billion during the initial 12-year terms of the contracts, with an estimated average annual revenue of about $290 million.
Core Scientific Hosting Deal with CoreWeave
Core Scientific views these contracts as a strategic entry into the AI space, alongside its existing Bitcoin mining operations, aiming to boost cash flow and mitigate risks. The company anticipates additional revenue streams from providing hosting services to other AI players, leveraging its robust infrastructure and expertise in the field.
The company underscores the burgeoning demand for high-power AI hosting sites, with current supply falling short. It reveals ongoing discussions with other firms regarding hosting their HPC operations. Core Scientific has nearly 500 megawatts of power that it can devote to such endeavors.
Notably, this partnership isn’t the first between the two companies. Core Scientific previously provided hosting services to CoreWeave from 2019 to 2022, and they renewed their collaboration with a new hosting deal in March of this year.
Core Scientific filed for bankruptcy in December 2022 due to rising energy costs and low crypto prices. However, it successfully emerged from bankruptcy earlier this year and is now poised for renewed growth and diversification.
Core Scientific (NASDAQ: CORZ) Stock Movement
On Tuesday, CORZ stock surged 40.25%, closing at $6.83, marking a 37.70% increase for the week. The trading volume was 68,790,576 shares, significantly higher than the average daily volume of 4.68 million.
