Morgan Stanley invests 500 million to help Core Scientific transition to AI, nearly clearing Bitcoin holdings

Bitcoin miner Core Scientific announced on Thursday that it has completed the initial closing of a $500 million, 364-day loan facility led by Morgan Stanley, with an option to increase the total commitment to $1 billion. The funds will support the company’s plan to convert existing mining facilities into AI high-density data centers. The company intends to liquidate “almost all” of its Bitcoin holdings by 2026, having sold over 1,900 coins in January.

Morgan Stanley Financing Structure and Use of Funds

(Source: Core Scientific)

This financing includes an incremental facility clause, allowing Core Scientific to add up to an additional $500 million on top of the initial $500 million, bringing the potential total commitment to $1 billion. The use of funds has been clearly outlined:

Real estate and pre-development: Purchasing related real estate and covering early renovation costs

Energy contract procurement: Securing additional energy supply agreements to support AI compute-intensive workloads

Infrastructure upgrades: Purchasing equipment to upgrade existing mining facilities in Texas, Georgia, and North Carolina into high-density computing data centers

CEO Adam Sullivan stated, “This enhances our liquidity and financial flexibility, enabling us to deploy capital decisively, accelerate project deployment, and become a more attractive infrastructure provider for our customers.”

Bitcoin Reserve Liquidation: From Accumulation to Rapid Sale

Core Scientific’s transformation is reflected in the rapid reduction of its Bitcoin holdings. As of December 31, 2025, the company held 2,537 BTC, with a fair market value of approximately $222 million, far above the 256 BTC held at the end of 2024, indicating significant accumulation last year. However, the direction changed sharply in 2026— in January, the company sold over 1,900 BTC, realizing about $175 million, leaving approximately 630 BTC remaining.

Adam Sullivan admitted during the Q4 earnings call that Bitcoin mining is “basically idle,” with the primary purpose of maintaining minimum power commitments rather than pursuing mining profits.

Industry Context of Miners Transitioning to AI

Morgan Stanley’s financing is a recent example of large traditional financial institutions increasing their involvement in crypto miners transitioning to AI data centers. Existing Bitcoin mining operations’ power contracts, land resources, and facilities overlap significantly with the infrastructure needs of AI high-density data centers, giving miners a structural advantage for rapid entry into AI compute expansion.

FAQs

What does the SOFR + 250 basis points interest rate in Morgan Stanley’s financing mean?
SOFR (Secured Overnight Financing Rate) is a major benchmark short-term interest rate in the US. Adding 250 basis points (2.5%) means that if SOFR is approximately 4.3%, the actual loan interest rate would be around 6.8%. This is a market-standard pricing for corporate transformation financing, reflecting the credit risk of such infrastructure projects.

Why did Core Scientific choose to liquidate its Bitcoin holdings by 2026?
After the Bitcoin halving, mining rewards decreased significantly, while the potential revenue from hosting AI data centers is much higher. Selling Bitcoin reserves provides rapid capital for the transition, and combined with Morgan Stanley’s loan funds, creates a dual financing structure to accelerate AI infrastructure development, maximizing the speed of transformation.

What are the main business risks after Core Scientific’s shift to AI data centers?
Key risks include competition from established data center operators like Equinix and Digital Realty; cyclical fluctuations in AI compute demand; and the technical and capital investments required to upgrade existing mining facilities into high-density computing environments. Whether the transition can be completed within the expected timeline and secure customer orders is critical to its success.