Core Scientific Inc.. CORZone of the largest in the world bitcoin BTC/USD Mining companies would remember 2024 as a year of change.
The company emerged from Chapter 11 bankruptcy in January and relisted its shares on Wall Street. Since his return, the company's shares have risen almost 260%.
The resurgence was largely fueled by a recovery in the price of Bitcoin, which had fallen to $16,000 when the company filed for bankruptcy in December 2022. Since the recovery, the company has pivoted toward a high-performance computing model. (HPC), which meets the demand of data centers for Artificial Intelligence Applications.
Benzinga spoke with Adam SullivanCEO of the company, on his strategy and the changing dynamics of the industry in the US.
Halving problems and the pivot to AI
Sullivan acknowledged the industry's problems, especially after the April halving, which reduced block rewards, a major component of mining revenue, by 50%.
The top executive revealed that the company's post-halving strategy, focusing on hash price, local energy costs and environmental factors, has successfully maximized fleet performance and profitability.
“We conducted extensive scenario analysis to understand the impact of different hash price assumptions on our business.”
Sullivan added that the company's HPC strategy was shaped over the past 18 months, when it saw a balance between supply and demand in the high-power data center market.
In contrast to the volatile Bitcoin mining business, Sullivan described the artificial intelligence business as a “predictable, profitable, long-term revenue stream.”
In early June, Core Scientific entered into a 12-year contract with NVIDIAsupported cloud provider Core tissue to provide infrastructure for AI use cases.
Sullivan said the company expected $6.7 billion in revenue as a result of the deal, positioning it as one of the largest publicly traded data center companies in the US.
See also: PayPal steps up the crypto game and allows US traders to buy, sell and hold digital assets
Historic agreement with Jack Dorsey's bloc in line with Trump's vision of “America first”?
Bitcoin mining received support from Republican presidential candidate Donald Trump, who wanted all remaining Bitcoins to be mined in the US.
Sullivan thanked all elected officials for their support, from the White House to Congress, local legislatures and city councils.
“We believe that Bitcoin and artificial intelligence represent strategic technologies that the United States must support and foster to ensure continued leadership on the global stage,” he said.
Sullivan also spoke about Core Scientific's historic purchase of mining chips from Jack Dorsey's company block inc. SQmoving away from the China-based market leader. Bitmain.
“We believe the new Block ASIC chips will improve our mining economics in terms of initial capital expenditures, ongoing maintenance and performance,” Sullivan said.
The CEO added that the deal reflected the capabilities of domestic chipmakers and that strong government support would pave the way for future success.
These ideas lay the groundwork for deeper discussions at Benzinga's next meeting. The future of digital assets event on November 19.
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