Bitmain Commits $54 Million Investment in Core Scientific, Inc. Amid New Supply Contract
Luisa Crawford Sep 22, 2023 06:20
Core Scientific has secured a $53.9 million investment from Bitmain, a leading manufacturer of digital currency mining servers. The deal involves a $23.1 million cash payment and an equity exchange worth $53.9 million in Core Scientific common stock. The partnership aims to boost the Bitcoin Network's efficiency and contribute to the company's self-mining hash rate.
At the World Digital Mining Summit, Core Scientific, Inc. (OTC: CORZQ), a North American leader in blockchain computing data centers and software solutions, disclosed a significant investment from Bitmain, the globally recognized manufacturer of digital currency mining servers. Bitmain's commitment amounts to $53.9 million, further cementing the bond between the two industry giants.
This collaboration will see Bitmain furnishing Core Scientific with 27,000 of its latest Bitmain S19J XP 151 TH bitcoin mining servers. The transaction involves a $23.1 million cash payment and an equity exchange worth $53.9 million in Core Scientific common stock. The equity's per-share value will be finalized following a chapter 11 plan of reorganization, anticipated to gain approval in the upcoming fourth quarter.
Max Hua, Bitmain's CEO, expressed his optimism about the strengthened ties with Core Scientific, praising their "professionalism, integrity, and commitment" to the Bitcoin Network's growth. He emphasized the shared vision of both companies in fostering the expansion of the Bitcoin Network, especially as global bitcoin adoption surges.
Core Scientific's history with Bitmain is deep-rooted. Since its inception in 2017, Core Scientific has managed over 600,000 Bitmain miners across its data centers. Presently, a staggering 99% of the 200,000 miners they operate, both owned and hosted, are Bitmain S19 models. Bitmain has also been a loyal hosting customer for nearly half a decade, entrusting Core Scientific with a significant portion of its mining equipment.
Adam Sullivan, CEO of Core Scientific, acknowledged the pivotal role Bitmain plays in their operations, stating, "Bitmain’s product quality, attention to service, and responsiveness are critical to our success." He further highlighted the anticipated efficiency boost the new miners would bring, especially in light of the upcoming halving event.
By the close of 2023's fourth quarter, Core Scientific aims to integrate and activate the 27,000 units, potentially adding 4.1 exahashes to its self-mining hash rate. Additionally, both parties have consented to upgrade older Bitmain miners at Core Scientific's facilities to the newer S19J XP models, promising an even greater hash rate increment.
As of the end of August 2023, Core Scientific boasted an impressive energized hash rate of 22.0 exahashes per second, spread across its data centers in five U.S. states. Their self-mining operations yielded 965 bitcoins in August alone, with a cumulative 9,755 bitcoins mined year-to-date, surpassing any other publicly listed bitcoin miner in North America.
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