Initial contracts between Core Scientific and AMD for 530 MW could generate over $14 billion in revenue over 15 years, with the chipmaker effectively acting as a credit guarantor for part of the bitcoin miner's infrastructure. Such estimates were provided by Bernstein analysts, reports The Block.
On July 28, the companies announced a partnership with the potential to allocate up to 2.5 GW of data center capacity for AI.
Lower Risk, Higher Margin
Bernstein broke down the contracted 530 MW into 377 MW of direct triple-net lease for AMD and 152 MW for an unnamed cloud provider with credit support from the chip manufacturer. Analysts estimate that this structure reduces financing costs and counterparty risk compared to models where the lessee relies on external credit support.
AMD also received warrants to purchase 30 million shares of Core Scientific at $23.47 per share. Vesting is linked to the partners achieving the target 2.5 GW, noted Bernstein.
The average annual revenue under the agreement is approximately $0.9 billion, or about $1.8 million per megawatt. This is 5–25% lower than the $1.9–2.4 million per megawatt range in recent miners' deals for hosting AI equipment. However, the 377 MW of direct lease under the triple-net model are arranged with a margin for AMD close to 100%. Analysts estimate the blended EBITDA from the deal at approximately 96%.
Core Scientific expects capital expenditures within the deal with AMD to be $11–12 million per megawatt, with a total figure around $6 billion. About $1 billion has already been spent, and the company plans to raise the remaining amount through project bonds.
Confirmation of a Trend
Bernstein specialists believe the Core Scientific-AMD partnership marks a new stage in the transformation of former bitcoin miners into operators of artificial intelligence infrastructure. Unlike early contracts, where lessees were effectively insured by technology companies like Google, now AI chip manufacturers themselves are willing to directly become anchor tenants and support multi-year projects.
Examples of such deals recently:
- Hut 8 announced the allocation of 704 MW to a lessee identified by the FT as Nvidia;
- AMD reserved 200 MW with Riot Platforms.
Recall that Core Scientific paid Block $41.9 million for terminating a contract for the supply of mining chips as part of accelerating diversification into AI.
