Crypto mining rig manufacturer Bitmain announced on Friday its plan to invest $53.9 million in Texas-based bitcoin mining firm Core Scientific, as part of a supply contract aimed at expanding their longstanding relationship. The deal involves a combination of equity and cash to finance the purchase of new bitcoin mining machines.
Under the agreement, Bitmain will supply Core Scientific with 27,000 bitcoin mining servers in exchange for $23.1 million in cash and $53.9 million in Core Scientific common stock. The bankruptcy court is expected to determine the company's stock value per share as part of the Chapter 11 reorganization plan, with approval anticipated in the fourth quarter of this year.
Core Scientific, which filed for Chapter 11 bankruptcy protection last December, stated it plans to receive and energize the new units in Q4 2023. This addition is expected to add a potential computing power of 4.1 exahashes to its self-mining hash rate. As of August end, Core Scientific operated about 206,000 bitcoin mining rigs at its U.S. facilities, with a total hash rate of 22 exahashes per second.
Max Hua, CEO of Bitmain, praised Core Scientific's commitment to their hosting customers and the growth of the Bitcoin Network. "Their professionalism, integrity, and commitment...is unsurpassed in the industry," Hua said in the statement.
The deal also includes a new hosting agreement between Bitmain and Core Scientific. Since its inception in 2017, Core has deployed over 600,000 Bitmain miners with about 99% of the company's hosting customers being Bitmain S19 models.
This partnership marks a significant development for North America's mining industry, potentially deepening it further with top-notch equipment and a clear roadmap for expansion. The collaboration comes at a time when the crypto-mining sector is facing regulatory challenges and volatile market conditions.
Core Scientific's CEO, Adam Sullivan, sees this as a platform for expanding their fleet as they prepare for the next halving. "We are honored to expand our significant relationship with Bitmain. Together, we have worked tirelessly to professionalize our industry," Sullivan said.
Last week, Core Scientific reached a tentative $45 million agreement with Celsius. The deal involves Celsius paying $14 million in cash with the remainder in adjusted claims for the Cedarvale mining site. Amid its bankruptcy case, Core Scientific is focused on optimizing performance and efficiency at both the data center and individual miner level to maintain its stance as a main global player.
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