Core Scientific Partners with CoreWeave in $100M Deal Amid Impending Bitcoin Halving
Summary:
Before the impending Bitcoin halving event, Core Scientific has collaborated with AI startup CoreWeave, promising potential earnings of over $100 million. Core Scientific will offer data centre services via a leased data centre in Austin, Texas. The miner commits to high-performance computing (HPC), providing up to 16 MW of capacity. CoreWeave is supported by major Wall Street firms and provides infrastructure for power-intensive uses like machine learning. With the halving event, miners will experience a decrease in revenues, with costs likely to increase. In 2023, Core Scientific became the largest publicly listed crypto mining firm in North America, but recently emerged from bankruptcy after a $400 million debt resolution.
Before the impending halving event, digital currency miner Core Scientific is looking for ways to augment its income sources. A financial deal promising potential earnings exceeding $100 million has been signed with AI startup CoreWeave, through which core scientific will provide data centre services. The lease involves a tier 3 data centre, formerly occupied by Hewlett Packard in Austin, Texas, which will house CoreWeave's infrastructure. As per the contract, the miner will offer a capacity of up to 16 MW at its Austin data centre, broadening its scope to high-performance computing (HPC).
CoreWeave, an AI cloud computing enterprise, enjoys the backing of leading financial entities on Wall Street, including Jane Street, J.P. Morgan Asset Management, and Fidelity. Offering infrastructure for power-intensive uses like machine learning, the startup company was valued at $7 billion at the close of December 2023.
Adam Sullivan, the CEO of Core Scientific, stated that along with providing for CoreWeave's immediate needs, the new Austin data centre will also amplify Core Scientific's hosting customer base across two sectors of high-value computation: Bitcoin mining and specialized GPU cloud computation.
Just a few weeks separate Core Scientific's expansion of services from the Bitcoin halving occasion, set to diminish BTC block reward income by half. The 2024 halving, following those in 2020, 2016, and 2012, will reduce the block reward to 3.125 BTC per block for miners, currently at 6.25 BTC per block. This halving exercise is meant to moderate Bitcoin's inflation by decreasing the availability of new coins gradually.
While mining operations will likely see significant slash in revenues, related costs are projected to rise. A study from CoinShares suggests the power expenses pre and post-halving for each Bitcoin will account for roughly 68% and 71% of the total costs for miners. After the halving, the estimated average production cost for crypto miners is expected to be $37,856.
In 2023, Core Scientific became the top public crypto mining organisation in North America after mining Bitcoin (BTC) worth $812 million, equivalent to 19,274 BTC. After 13 months of re-structuring to settle $400 million debt resulting from plummeting BTC prices, escalating energy expenses, and debts linked to the bankrupt Celsius Network, the miner recently filed for bankruptcy under Chapter 11 in the United States.
Published At
3/7/2024 8:02:35 PM
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