AI · The Block
Core Scientific’s 75% return on AI pact isn’t the template for bitcoin miners, Bernstein confirms
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Core Scientific's (CORZ) AI colocation deal with CoreWeave generates a five-year average return on assets of 75% and a yield on cost of 79%, but the economics behind those numbers are not the sector norm, Bernstein said in a Wednesday note.
Key facts
- Per Bernstein, the company pays an effective $1.5 million per IT MW on 590 MW contracted to CoreWeave, with the tenant financing $750 million of the $855 million total through revenue prepayments
- TeraWulf's capex advantage runs to $8 million to $10 million per IT MW, against Cipher's $9 million to $11 million per IT MW, a function of existing power and transmission infrastructure
- CleanSpark's $6.6 billion, 20-year lease for 175 IT MW in Sandersville, Georgia, reportedly its first AI colocation deal, carries an average annual revenue yield of roughly $1.9 million per IT MW
- Cipher's repeat contract with AWS lifted revenue yield to $1.9 million per IT MW from $1.7 million, roughly 13% higher, without giving up the triple-net structure
Summary
Analysts at the brokerage and research firm led by Madison Rezaei and Gautam Chhugani applied a stabilized returns framework to data center REITs and bitcoin miners, then pivoted to AI infrastructure, comparing Digital Realty and Equinix against TeraWulf (WULF), Cipher (CIFR), Core Scientific, CleanSpark (CLSK), and Riot Platforms (RIOT). Core Scientific's returns are driven by the capex structure rather than the deal terms. Per Bernstein, the company pays an effective $1.5 million per IT MW on 590 MW contracted to CoreWeave, with the tenant financing $750 million of the $855 million total through revenue prepayments and the remaining $105 million coming off Core Scientific 's balance sheet.