Yahoo Finance

Take a look at Core Scientific, the digital mining company, reporting a disappointing fourth quarter with total revenue coming in at 94 million compared to 141 million a year earlier. Joining us now, we've got Adam Sullivan, Core Scientific's CEO. Adam, great to have you on this morning. Talk to me about the strategic decision making when it comes to investing in more of these data centers as a revenue driver moving forward, and how that might be weighing on your revenue currently, but how you see that as a growth story moving forward.

Yeah, absolutely, and thank you for having me on. You know, this is all part of a long-term transition that Core Scientific is going for. Last year, we signed over 500 megawatts worth of contracts. We followed it up, you know, just just last week with another 1.2 billion dollar contract. So from a long-term basis, Core Scientific is in a stronger position than ever, and we're hyper focused on continuing to invest in new locations, new geographies, and bringing new clients into Core Scientific. Because this is really about a broader shift in the industry of where power is going in America. Power is going to compute. And we are a part of that trend, and we are going to be a major growth factor to help facilitate bringing more compute online for all types of use cases, not just artificial intelligence as, you know, the the news really likes to talk about these days.

Adam, is that the number one priority right now of Core Scientific? And I guess to what degree is that going to then shape how you navigate or some of those opportunities in the future?

Yeah, I mean, this is really our sole focus today is really to continue to drive growth into this into this business line. You know, Bitcoin mining was really provided a very strong foundation for our company early on. We were the largest operator of of infrastructure dedicated to Bitcoin mining in North America. And we've been able to pivot that entire business now, almost that entire business, to building large scale data centers to fulfill this massive trend that's going on in the industry.

Adam, um, I I know you're going to say no, but when you hear of the strategic Bitcoin reserve and see the lift in crypto stocks today, do you have any regret about transitioning as fully away from Bitcoin mining as a key cornerstone of the business?

Absolutely not. You know, the the broader trends in the data center industry right now provide for long-term contracts that provide significant amounts of free cash flow. Now we're talking about strategic Bitcoin reserves, potentially other cryptocurrencies as well, even with Bitcoin price increasing significantly, mining economics have continued to decline over time, and that's a trend that will continue over the course of the next 5, 10, 20 years, really no matter where Bitcoin price goes. And that's because the infrastructure development, the advancements in chips really keep a a ceiling on where mining economics can go over the long term.

It's an interesting comparison, and I know it comes in the context of you unveiling plans for that 1.2 billion dollar data center expansion in partnership with CoreWeave. Why is now the time to be betting on AI strengthening moving forward as a revenue driver, especially given the questions that we're hearing about the amount of capex from Big Tech firms into AI and questions about DeepSeek that are pointing to concerns about how much people are spending on AI and training?

Yeah, I think the most important thing that we saw after the DeepSeek news was every single hyperscaler announced during, really, the following week or two weeks following, and everyone increased their capex expectations. I mean, what we're seeing is a broader adoption of AI, really what we're seeing is if we're at the very early stages of the growth trend. So at the very early stages of a hockey stick style growth where right now it's humans interacting with agents. And what we're going to see going forward is more AI agents interacting with each other, which is going to continue to drive further demand in this ecosystem. And so we're going to start to see this ramp significantly over time as everything we interact with on a daily basis is going to be touching a data center soon. And so that's one of the most important things to note, and the reason why we're at the earliest point in this trend that we possibly could be, because this is really going to be a 5, 10, 20 year bull cycle of continuing to develop compute and continuing to invest, especially in inference facilities, which are really some of the most necessary facilities to help facilitate your day-to-day uses and interactions with artificial intelligence.

Adam, can you tell us just about your ongoing discussions, whether or not you're having ongoing discussions. I'm guessing you are with some of those hyperscalers that you were just referencing and maybe what that tells us just about Core Scientific's role here in five to 10 years from now.

Yeah, yeah, I mean every hyperscaler wants to move more quickly. I think the, you know, last year we saw a lot of news around one of the hyperscalers really making a big push into building big data centers. Now we fast forward to where we are today in in March of 2025. Now the hyperscalers feel behind from where, you know, when they were watching all this occur back in 2024. And so everyone wants to move with greater speed, everyone wants faster delivery, but there are massive supply chain constraints in this industry today that are pushing out delivery of infrastructure, even if you sign a contract today, 12 or 18 months out at the earliest. And so what they're trying to do right now is get all of the facilities that they want over the for their five and 10 year plans, they want to secure all those this year to ensure that they can actually meet the delivery schedules that they're promising to their end clients. This is really about how much market share can you capture in this industry? And for the hyperscalers, they're all in an arms race now to secure as much power capacity as they possibly can to ensure they can meet any demand that they receive from a client.

Adam Sullivan, we have to leave it there, but thanks so much for taking the time to join us, CEO of Core Scientific.