Bitmain will supply Core Scientific with 27,000 latest generation bitcoin miners and signs new hosting agreement
HONG KONG–(BUSINESS WIRE)–$CORZQ #bitcoin—World Digital Mining Summit – Core Scientific, Inc. (OTC: CORZQ) (“Core Scientific” or “the Company”), a leader in high-performance blockchain computing data centers and software solutions, today announced Bitmain, the world’s leading manufacturer of digital currency mining servers, has agreed to invest $53.9 million in the Company, expanding the two companies’ longstanding relationship.
Bitmain and Core Scientific have agreed on a combination of equity and cash to finance the purchase of new and more efficient bitcoin mining equipment. Separately, Bitmain has executed a new hosting agreement with Core Scientific to support Bitmain’s mining business. The deals demonstrate Bitmain’s ongoing commitment to the North American digital asset mining industry.
“We look forward to deepening our strategic relationship with Core Scientific, our long-standing U.S.-based partner,” said Max Hua, Bitmain CEO. “Their professionalism, integrity, and commitment to the success of their hosting customers and to the growth of the Bitcoin Network is unsurpassed in the industry.”
Under the terms of the purchase agreement, Bitmain will supply Core Scientific with 27,000 Bitmain S19J XP 151 TH bitcoin mining servers in exchange for $23.1 million in cash and $53.9 million in Core Scientific common stock at a per share value that will be determined in accordance with a bankruptcy court approved chapter 11 plan of reorganization, the approval of which is expected during the fourth quarter of this year. The S19J XP operates at a high efficiency level of 21.7 Joules per TH/s.
“We are honored to expand our significant relationship with Bitmain,” said CEO of Core Scientific, Adam Sullivan. “Together, we have worked tirelessly to professionalize our industry, charting a path for the long-term growth of the Bitcoin Network as bitcoin adoption increases around the world.”
Core Scientific has operated more than 600,000 Bitmain miners across its data centers since beginning operations in 2017. Today, 99% of the more than 200,000 miners the Company currently operates for itself and its hosting customers are Bitmain S19 models, including those owned by Core Scientific and those hosted for customers. In addition to supplying miners to Core Scientific, Bitmain has been a hosting customer for nearly five years, entrusting the Company to operate and maintain a large number of its own miners.
Sullivan added, “Bitmain’s product quality, attention to service and responsiveness are critical to our success in supporting the Bitcoin Network. The new miners we are securing with this agreement will enhance our mining fleet’s efficiency as we continue to prepare for next year’s halving event and beyond.”
“Core Scientific is an important contributor to the strength and stability of the Bitcoin Network, and we look forward to working closely with their team to help realize Bitcoin’s full potential,” Hua added.
The Company plans to receive and energize the 27,000 units in the fourth quarter of 2023, adding a potential 4.1 exahashes to its self-mining hash rate. The two industry leaders have also agreed to work together to upgrade Bitmain’s previous generation miners hosted at Core Scientific’s data centers with S19J XP servers, effectively increasing the Company’s total hash rate further.
As of August 31, 2023, Core Scientific operated approximately 206,000 bitcoin miners for both colocation and self-mining, representing a total energized hash rate of 22.0 exahashes per second at its data center facilities in five U.S. states. Core Scientific’s self-mining operations produced 965 bitcoin in August, and 9,755 bitcoin year to date through August 31, more than any other listed bitcoin miner in North America.
Bitmain is the world’s leading manufacturer of digital currency mining servers through its brand ANTMINER, which has long maintained a global market share and leading position in technology, serving customers across over 100 countries and regions. The company has subsidiaries in China, the United States, Singapore, Malaysia, Kazakhstan, and other locations.
ABOUT CORE SCIENTIFIC
Core Scientific (OTC: CORZQ) is one of the largest blockchain computing data center providers and miners of digital assets in North America. Core Scientific has operated blockchain computing data centers in North America since 2017, using its facilities and intellectual property portfolio for colocated digital asset mining and self-mining. Core Scientific operates data centers in Georgia, Kentucky, North Carolina, North Dakota and Texas. Core Scientific’s proprietary Minder® fleet management software combines the Company’s colocation expertise with data analytics to deliver maximum uptime, alerting, monitoring and management of all miners in the Company’s network. To learn more, visit http://www.corescientific.com.
FORWARD LOOKING STATEMENTS AND EXPLANATORY NOTES
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, those related to the Company’s ability to scale and grow its business, meet its expected operating plan, source clean and renewable energy, the advantages and expected growth of the Company, future estimates of revenue, net income, adjusted EBITDA, total debt, free cash flow, liquidity and future financing availability, future estimates of computing capacity and operating capacity, future demand for colocation capacity, future estimate of hash rate (including mix of self-mining and colocation) and operating gigawatts, future projects in construction or negotiation and future expectations of operation location, orders for miners and critical infrastructure, future estimates of self-mining capacity, the public float of the Company’s shares, future infrastructure additions and their operational capacity, and operating capacity and site features of the Company’s operations and planned operations. These statements are provided for illustrative purposes only and are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company’s management. These forward-looking statements are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the Company’s ability to obtain bankruptcy court approval with respect to motions in its Chapter 11 cases, successfully enter into and implement a restructuring plan, emerge from Chapter 11 and achieve significant cash flows from operations; the effects of the Chapter 11 cases on the Company and on the interests of various constituents, bankruptcy court rulings in the Chapter 11 cases and the outcome of the Chapter 11 cases in general, the length of time the Company will operate under the Chapter 11 cases, risks associated with any third-party motions in the Chapter 11 cases, the potential adverse effects of the Chapter 11 cases on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; satisfaction of any conditions to which the Company’s debtor-in-possession financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; the consequences of the acceleration of the Company’s debt obligations; the trading price and volatility of the Company’s common stock as well as other risk factors set forth in the Company’s reports filed with the U.S. Securities & Exchange Commission. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Accordingly, undue reliance should not be placed upon the forward-looking statements.
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