Core Scientific's new partnership with AMD is projected by Bernstein to generate $14 billion in revenue over 15 years, highlighting a significant shift for former Bitcoin miners into AI hosting. This deal, along with similar agreements in the sector, signals a growing trend of chipmakers financing AI infrastructure through long-term data center leases, potentially transforming the business models of these companies.
Core Scientific (CORZ) has entered a 530-megawatt contracted capacity agreement with AMD, which Bernstein projects could yield $14 billion in revenue over 15 years. This is a pivotal development as it signifies a strategic pivot for former Bitcoin miners towards AI hosting, leveraging their existing power infrastructure. The deal is expected to generate nearly 100% margins for CORZ due to its triple-net structure, despite a modest revenue per megawatt compared to other AI colocation agreements. This trend is broader, with other chipmakers like Nvidia and AMD themselves engaging in similar long-term leases with companies like Hut 8 and Riot Platforms. For traders, this presents a long-term opportunity for CORZ as it diversifies its revenue streams and capitalizes on the booming AI infrastructure demand, potentially transforming its valuation. The key risk lies in the execution of the project and the financing of the remaining $5 billion in capital expenditure through project-level debt.