Core Scientific Pays $42M to Exit Block’s Bitcoin Mining Deal as AI Revenue Surges

Core Scientific (NASDAQ: CORZ) has paid $41.9 million to terminate a bitcoin miner contract with Block and its Proto unit, underscoring the data center operator’s accelerating retreat from bitcoin mining toward AI infrastructure.

The settlement canceled the existing contract and all future equipment deliveries, Core Scientific said in its second-quarter regulatory filing. The company tied the decision directly to the wind-down of its remaining mining obligations and its transition to high-density colocation operations. The filing didn’t disclose the settlement’s payment terms beyond the resulting $41.9 million loss.

The terminated agreement, announced in July 2024, called for Block’s Proto division to supply 3-nanometer mining chips representing about 15 EH/s of computing power. It was one of the industry’s largest announced mining-chip transactions by hashrate and included an option for additional volume.

Canceling the order removes what had been a potentially substantial expansion of Core Scientific’s mining fleet. The company now says it isn’t investing in new mining equipment to maintain or expand its hashrate. Instead, it plans to extract cash from the remaining fleet while converting facilities and selling or retiring miners when appropriate.

That shift was already visible in Core Scientific’s second-quarter results. Colocation revenue rose to $136.7 million from $10.6 million a year earlier, accounting for 83% of total revenue, compared with 13% in the prior-year period.

Self-mining revenue fell 66% to $21.5 million from $62.4 million and represented just 13% of quarterly revenue, down from 80% a year earlier. Revenue from third-party mining hosting was $6 million.

Core Scientific said bitcoin production declined 53% from a year earlier during the quarter, while its average realized bitcoin price fell 27%. The company has been reallocating power from mining equipment to data-center capacity used for graphics-processing units and other high-density computing systems. Core added that it had 395 megawatts of billable colocation capacity as of June 30 and 437 megawatts by mid-July. Total leased customer capacity has reached about 1.1 gigawatts.

The figures provide the clearest evidence yet that Core Scientific, once one of North America’s largest publicly traded bitcoin miners, is becoming an AI-infrastructure landlord primarily. Its colocation revenue currently comes entirely from CoreWeave (NASDAQ: CRWV) Inc., which accounted for about 77% of total revenue in the first half, leaving the company heavily dependent on a single customer even as it expands its tenant base.

Core Scientific this week announced a separate partnership with Advanced Micro Devices Inc. covering as much as 2.5 gigawatts of potential data-center capacity. Initial 15-year agreements cover about 530 megawatts across five locations and could generate more than $14 billion in base contracted revenue.

Overall second-quarter revenue more than doubled to $164.2 million from $78.6 million, while its capital spending climbed to $797.5 million from $121.3 million as the company funded its data-center buildout.

Core Scientific had about $1 billion of outstanding purchase and construction commitments at June 30, most of which it expects to spend within 12 months. It also reported $4.3 billion of long-term debt and $1.82 billion of liquidity.