Core Scientific's AI Bet: Billions in Contracts, High Stakes

Core Scientific is pivoting from Bitcoin mining to AI and high-performance computing colocation, emerging from Chapter 11 bankruptcy in January 2024. By the second quarter of 2026, revenue had more than doubled year-over-year to $164.2 million, with colocation revenue soaring to $136.7 million. Gross margins stand at 43%, with colocation margins reaching an impressive 59% as of the second quarter of 2026. The company has secured approximately 1.1 gigawatts of contracted power capacity, representing over $24 billion in potential future revenue. This includes a significant commitment from AMD for 530 megawatts across five sites, valued at over $14 billion, with options to expand further.

Despite progress, Core Scientific faces substantial risks. The company reported a net loss of approximately $1.16 billion in the second quarter of 2026, largely due to a non-cash accounting charge. To fund its expansion, it issued $3.3 billion in secured notes with a 7.75% interest rate. Operating reliability, including power, cooling, and connectivity, is crucial for sustained revenue. Management is counting on continued access to debt markets, but a disclosed material weakness in financial reporting and customer concentration add further concerns.