Core Scientific pays $41.9M to cancel Block mining deal

Core Scientific paid $41.9 million to terminate a bitcoin-miner equipment contract with Block’s Proto, according to its second-quarter regulatory filing. The agreement cancels the existing contract and all future equipment deliveries tied to the Block deal.

The contract, announced in July 2024, called for 3-nanometer mining chips representing about 15 exahashes per second of computing power and included an option for additional volume. The filing records a $41.9 million loss on the cancellation and provides no further payment details. Core Scientific indicated it will not purchase new mining hardware to maintain or grow hashrate.

The company plans to monetize remaining miners by selling or retiring equipment, reallocate power to host graphics-processing units and other high-density systems, and convert data-center space to serve third-party tenants.

Second-quarter results show the revenue mix shifting away from self-mining. Colocation revenue rose to $136.7 million from $10.6 million a year earlier, representing 83% of total revenue versus 13% in the prior-year period. Revenue from self-mining fell 66% to $21.5 million, making up 13% of quarterly revenue, and third-party mining hosting generated $6 million. Bitcoin production declined 53% year over year and the company’s average realized bitcoin price fell 27%.

Core Scientific reported 395 megawatts of billable colocation capacity as of June 30 and 437 megawatts by mid-July. Total leased customer capacity reached about 1.1 gigawatts. Colocation revenue in the first half of the year was heavily concentrated: one customer, CoreWeave, accounted for approximately 77% of total revenue.

The company announced a partnership with Advanced Micro Devices that could cover as much as 2.5 gigawatts of potential data-center capacity. Initial 15-year agreements span about 530 megawatts across five locations and could generate more than $14 billion in base contracted revenue, according to the company.

Overall second-quarter revenue rose to $164.2 million from $78.6 million a year earlier. Capital expenditures increased to $797.5 million from $121.3 million. At June 30, Core Scientific reported roughly $1 billion of outstanding purchase and construction commitments, $4.3 billion of long-term debt and $1.82 billion of liquidity.

The regulatory filing states the company is winding down remaining mining obligations and converting facilities to host high-density computing tenants going forward.