Advanced Micro Devices (AMD) signed an agreement with data center operator Core Scientific on July 28 to secure up to 2.5 gigawatts of data center capacity. The deal grants AMD access to more than 500 megawatts of AI-ready infrastructure starting in 2027, which is part of the 529 megawatts of U.S. AI capacity AMD secured under 15-year leases, with further options to expand to the full 2.5 gigawatts.
Under the terms of the partnership, AMD will enter into 15-year leases for 529 megawatts of U.S. AI capacity, generating base contracted revenue of more than $14 billion. AMD directly leased 377 megawatts across Core Scientific sites in Pecos and Hunt County, Texas, and Muskogee, Oklahoma. Additionally, an unnamed cloud provider leased 152 megawatts in Auburn, Alabama, and Dalton, Georgia, under agreements supported by AMD.
The two companies will collaborate on data-center design and the deployment of AMD Instinct graphics processing units, EPYC processors, and ROCm software. Financial terms were not fully disclosed, but AMD will receive market-priced warrants to purchase Core Scientific common stock, subject to commercial conditions.
AMD received warrants to purchase up to 30 million Core Scientific shares at $23.47 per share. Approximately 6.5 million of these warrants vested when the initial leases were signed, with further warrants vesting as additional capacity is contracted.
Shift from cryptocurrency to AI
Core Scientific has been shifting its business model from cryptocurrency mining to hosting AI and high-performance computing workloads. This transition comes as demand for electricity, land, and data center facilities surges due to increased AI investments by cloud providers and enterprises.
In the second quarter, Core Scientific's colocation revenue was $136.7 million, representing 83% of its total $164.2 million revenue. Meanwhile, self-mining revenue fell 66% to $21.5 million. As of mid-July, the company billed customers for 437 megawatts, equivalent to about $635 million in annualized colocation revenue.
Core Scientific's leased customer capacity reached roughly 1.1 gigawatts, representing more than $24 billion in potential revenue. The company also terminated an agreement to buy Block's bitcoin-mining chips, recording a $41.9 million charge. The agreement had covered 3-nanometer chips representing roughly 15 EH/s of hashrate.
Market reaction and holdings
Following the announcement, Core Scientific's shares rose in premarket trading, while AMD's stock declined. Reports indicated that Core Scientific shares rose between 5.6% and 6%, while AMD stock fell 4%. Over the last 12 months, Core Scientific stock has risen 50% to trade at $20.74 per share, while AMD stock has gained 185% to trade at $494.95 per share.
As of June 30, Core Scientific held 848 Bitcoin worth $49.7 million, an increase from 547 Bitcoin three months earlier. In the first quarter of the year, the company sold 2,385 Bitcoin for $208.2 million.