Core Scientific (NASDAQ: CORZ) secured a 15-year infrastructure partnership with Advanced Micro Devices (NASDAQ: AMD) that covers 529 megawatts of U.S. artificial intelligence capacity and could generate more than USD$14 billion in contracted revenue.
Announced on Friday, the agreements let AMD reserve another 1,925 MW through Dec. 28, 2028, under certain conditions. The deployments are expected to begin in 2027.
If exercised, that option would expand the partnership to roughly 2.5 gigawatts. This would give AMD access to significantly more computing capacity as demand for AI infrastructure continues to grow.
AMD directly leased 377 MW. The capacity spans Core Scientific sites in Pecos and Hunt County, Texas, and Muskogee, Oklahoma.
Meanwhile, an unnamed cloud provider leased another 152 MW in Auburn, Alabama, and Dalton, Georgia, through agreements backed by AMD, bringing the total initial commitment to 529 MW.
The companies will jointly design future facilities. Furthermore, they plan to deploy AMD Instinct graphics processing units, EPYC processors and ROCm software across the new infrastructure.
AMD also received warrants to purchase up to 30 million Core Scientific shares at USD$23.47 each, creating an additional financial incentive as the companies expand the partnership over time.
The initial warrants covered 6.5 million shares.
However, more warrants will vest as Core Scientific signs additional capacity agreements under the partnership.
The company now has roughly 1.1 GW under lease. Those agreements represent more than USD$24 billion in potential contracted revenue, while the company said it was billing customers for 437 MW in mid-July, equal to approximately USD$635 million in annualized colocation revenue.
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Many miners already own the land and infrastructure
Also, the company continued shifting away from bitcoin mining. Colocation generated USD$136.7 million, or 83 per cent of second-quarter revenue, while self-mining revenue dropped 66 per cent to USD$21.5 million.
Across the industry, miners have pivoted toward artificial intelligence infrastructure as the economics have become more attractive than cryptocurrency mining.
The 2024 Bitcoin halving reduced mining rewards by half, while rising network difficulty and competition have continued to pressure profitability. By comparison, leasing powered data centre capacity to AI customers generates long-term revenue with higher margins and stronger cash flow.
Many miners already own the land, electrical infrastructure and high-capacity grid connections needed for AI facilities. This allows them to repurpose existing assets instead of relying on the volatile price of bitcoin.
Companies including Core Scientific, Hut 8 (NASDAQ: HUT), and Cipher Mining (NASDAQ: CIFR) have increasingly expanded into AI and high-performance computing, viewing those businesses as more stable and potentially more profitable over the long term.
Subsequently, Core Scientific ended its agreement with Block (NYSE: XYZ) to purchase bitcoin-mining chips. About 6.5 million warrants were vested when the first leases were signed. The cancelled chip agreement resulted in a USD$41.9 million charge tied to 3-nanometer hardware that represented about 15 exahashes per second of mining capacity.
Customers were billed for 437 MW as of mid-July, according to the company. Core Scientific held 848 bitcoin worth USD$49.7 million on June 30 after selling 2,385 bitcoin for USD$208.2 million during the first quarter, while CORZ shares rose 5.6 per cent in pre-market trading and AMD fell 4 per cent.
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