Pivoting To AI

 

Three years ago, one of the world’s largest bitcoin miners offered a lifeline to the town of Denton, Texas, a community burdened with tens of millions of dollars in debt. The miner, Core Scientific, wanted to build a data center in the city. In exchange for a massive power contract that would double Denton’s energy footprint, the company would provide much needed revenue in the form of taxes and fees. Denton accepted.  But within months of powering on, Core Scientific filed for bankruptcy after being saddled with its own outstanding debt. Now, on the heels of the artificial intelligence boom, Core Scientific has reinvented itself as a cloud computing company for AI startups. Last month, the former crypto miner announced that its Denton facility will transform into what it claims will be one of the largest AI supercomputers in North America. It received a green light from Denton’s local government to increase its previously 297-megawatt power agreement by another 100 megawatts, enough to run nearly 400,000 homes—a capacity larger than Elon Musk’s “Colossus” supercomputer in Memphis, Tennessee. Core Scientific was drawn to Denton because of its abundance of electricity and cheap real estate. When Core Scientific proposed building its data center in town—a project that would supposedly deliver the utility up to $8 million a year in revenue—the city’s local power utility was $140 million in debt after a historic winter storm in 2021. Residents and some Denton city officials were skeptical of the project because of its secretive nature and large energy footprint, but they ultimately supported the project after the utility convinced them that Core Scientific would shoulder 100% of the risk.

WHY IT MATTERS

“Driven by the artificial intelligence frenzy, industrial-scale crypto miners—with existing access to infrastructure and massive power contracts—are looking for ways to pivot their operations to AI computing,” says Forbes senior writer Sarah Emerson. “Core Scientific is one of the largest bitcoin miners to have successfully transitioned its business to AI, and did so in the aftermath of bankruptcy. What remains to be seen is whether these AI supercomputers, which must run continuously, will be a burden to local energy grids.”