Summary:
Core Scientific expands AI collaboration with CoreWeave for future growth.
The agreement aims for $8.6 billion in revenue over 12 years.
AI operations require different infrastructure compared to bitcoin mining.
Core Scientific's experience gives it a competitive advantage in the AI space.
The firm has been involved in AI since 2019, prior to its recent resurgence.
Core Scientific's AI Expansion
Core Scientific is expanding its AI deal with CoreWeave. Russell Cann, Chief Development Officer at Core Scientific, discussed the multi-billion dollar agreement aimed at enhancing AI capabilities through infrastructure development.
Core Scientific's investment is projected to generate $8.6 billion in revenue over 12 years, as the company builds 500 megawatts of infrastructure. The mining industry has faced significant challenges post the fourth Bitcoin halving, leading companies like Hut 8 and HIVE to pivot towards AI operations.
Core Scientific's Unique Position
Core Scientific's unique business model, focusing on application-specific infrastructure, gives it a competitive edge in integrating AI with mining operations. The company began its foray into AI in 2019, establishing itself as a pioneer in the space. Despite facing bankruptcy in 2022, it has emerged with a robust technical foundation.
According to Wolfie Zhao of BlocksBridge Consulting, Core Scientific's long history in building and operating infrastructure sets it apart from newer entrants.
The Complexities of AI and Bitcoin Mining
The agreement with CoreWeave delineates responsibilities, with Core Scientific constructing AI-specific data centers while CoreWeave manages the machines and software. The costs and requirements for AI operations differ significantly from bitcoin mining, with AI needing constant uptime and costly power redundancy systems.
For instance, the construction costs for AI infrastructure can reach $10 million to $12 million per megawatt, compared to $500,000 to $750,000 for bitcoin mining.
Leveraging Experience
Core Scientific's experience with high-performance computing and its previous operation of AI clusters have positioned it to capitalize on current market conditions. The firm has adapted its strategies to take advantage of the rapidly evolving landscape of AI and bitcoin mining.
Russell Cann emphasizes that while many see the pivot to AI as new, Core Scientific has been involved in AI for years. The team's extensive experience in a 24/7 global market gives them an edge over competitors lacking bitcoin mining experience.
Edited by Stephen Alpher and Nick Baker.
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