Core Scientific: The Dimmer Switch That Became a Data Center

Where did Core Scientific come from?

From Bellevue, Washington, in 2017, and from Austin by the time anyone outside the industry had heard of it. The company moved its headquarters to Barton Springs Road before its merger with a special-purpose acquisition company, and when it listed on January 20, 2022 it called itself an Austin company with about $222 million of fresh trust money and a valuation of $4.3 billion.^[3][1] The business behind the valuation was real: $544.5 million of revenue in 2021, a $47.3 million profit, 5,769 bitcoin mined for its own account and 13.5 exahash of machines, about half of them hosted for other people.^[4] The hosting half is what would put it in a Houston courtroom.

Its first Texas site was Denton, announced in October 2021 as a 300-megawatt “blockchain data center” at 8171 Jim Christal Road beside the city's own gas-fired Denton Energy Center, and promised carbon-neutral through renewable certificates.^[5] A second, at Pecos in the Permian Basin, ran on real-time power prices through MP2 Energy.^[11] The 2022 annual report lists Denton at up to 297 megawatts, about 234,000 machines across the fleet, and 235 employees.^[11]

What did Denton sign, and why?

Denton Municipal Electric came out of Winter Storm Uri in February 2021 having spent about $210 million on emergency power at $9,000 a megawatt-hour and owing about $140 million it did not have. That summer a company approached it with a proposal to buy $9 to $11 million a year of power at full build-out, invest $200 million, and create sixteen permanent jobs; the council approved the power purchase agreement and a seven-year land lease on August 24, 2021, near-unanimously, with one member, Deb Armintor, opposed.^[7][6]BuzzFeed News reconstructed the process the following March: a 138-page contract with pages redacted, council members told they could not name the counterparty, a confidential curtailment agreement with ERCOT, and a clause letting the utility open the breaker when the grid was short while owing the company nothing if it did not. A resident: “It's so weird the way everything was done so secretively.”^[7]

The argument for the deal was the one Texas miners make everywhere: a large, interruptible load that pays for transmission and gets out of the way in a crunch. The utility's general manager would later tell KERA that since Uri there had been zero forced outages.^[25] Whether the mine deserves any of the credit is not in the record; the contract's curtailment terms are.

Why did it go bankrupt, and what came out the other side?

Because its customers stopped paying. Celsius Mining, the mining arm of a lender that collapsed in July 2022, was the largest hosting customer and stopped meeting its power bills; the bitcoin price fell toward $16,000; and the company had about $513 million of convertible notes sold in 2021 at the top. On December 21, 2022 eleven Core Scientific entities filed for Chapter 11 in Houston, case 22-90341, with a noteholder group holding more than 70% of the paper agreed to take most of the new equity. The company's own list of causes was the price, the power, and “failure by certain of its hosting customers to honor their payment obligations.”^[8][9][10] The 2022 net loss was $2.15 billion.^[15]

The Celsius fight ran on inside two bankruptcies. On January 3, 2023 Core Scientific powered down more than 37,000 Celsius machines under a court order, saying it had absorbed about $7.8 million of Celsius's power costs; Celsius claimed $312 million in damages and moved for contempt.^[12][14] They settled on September 15, 2023: Core sold Celsius its Cedarvale site in Ward County, 215 megawatts of available power, for $14 million in cash against a $45 million agreed value, and both sides walked away from every claim.^[13] In August Adam Sullivan, a banker who had been the company's president, replaced Mike Levitt as chief executive; Levitt stayed as chairman.^[16]

What came out on January 23, 2024 is the unusual part. Judge Christopher Lopez confirmed a plan that paid creditors in full or in stock, removed about $1 billion of debt assuming the new warrants were exercised, funded a $55 million rights offering that was oversubscribed, and left the existing shareholders with about 60% of the reorganized company.^[17] “A tremendous recovery for both unsecured creditors and also equity holders,” the judge said; more than 240 jobs were preserved.^[18] The stock relisted on January 24 with bitcoin near $43,000, nearly three times the price on the day of the filing.^[19][20] A page that said Core Scientific's bankruptcy wiped out its shareholders would be wrong. What it wiped out was the 2021 valuation, and what it created was a class of warrants whose fair value has driven the company's reported losses ever since.

How did the mine become a data center?

By way of a tenant that wanted to be an owner. CoreWeave, the GPU cloud company, offered $5.75 a share for Core Scientific in June 2024, about $1.02 billion; the board declined.^[34]What it accepted instead, on June 3, was a set of twelve-year hosting contracts: 200 megawatts of CoreWeave's computing in Core Scientific's buildings, more than $3.5 billion of cumulative revenue, the tenant paying for the construction.^[21] CoreWeave exercised option after option; by October 22, 2024 the contracts covered about 500 megawatts and $8.7 billion, and by February 2025, with a $1.2 billion expansion at Denton, about 590 megawatts and $10.2 billion.^[22][27]

Denton had to agree, and did. On November 19, 2024 the council voted unanimously to expand the lease from about 31 acres to 78.85 and the contracted power from 297 megawatts to 394, for what the company and the city both called a $6.1 billion investment: $194 million in property tax to the city over ten years, 300 on-site jobs, no incentives, two new substations, transmission by 2029.^[23][24][26]Sullivan: “Denton has been home to one of our most advanced data centers, and now we expect it will host one of the largest GPU supercomputers in North America.”^[23] A council member said the change “gets rid of the problematic associations that crypto has.”^[25]The utility's planners put the harder truth on the record the same week: peak load up 73% by 2044, energy served up from 1.8 to 4.8 million megawatt-hours, the city's share of any statewide load shed roughly doubling, and a site that would no longer act as a “dimmer switch.”^[25] The flexibility that sold the mine in 2021 was the thing the conversion removed.

Then CoreWeave tried again. On July 7, 2025 the two companies announced an all-stock merger: 0.1235 CoreWeave shares per Core Scientific share, about $9 billion, a 66% premium to the June price, and more than $10 billion of lease payments eliminated.^[31] CoreWeave's stock fell through the summer and took the offer down with it; by September 25 the implied price was about $15.64.^[34] Two Seas Capital, the largest active shareholder, published its case against the deal on October 13: “inadequate value to Core Scientific shareholders, who own one of the best high-performance computing assets in the world.”^[33] On October 30 the stockholders voted it down. CoreWeave: “We respect the views of Core Scientific stockholders and look forward to continuing our commercial partnership.”^[35] The company that had been through Chapter 11 two years earlier had just refused nine billion dollars.

What has it built since?

Debt, land, and a second tenant. On March 2, 2026 it reported 2025: revenue of $319 million, of which $65.4 million from colocation; a net loss of $288.6 million; about 350 megawatts energized for CoreWeave; and a restatement of 2024 and most of 2025, because mining equipment slated for demolition in the conversions had stayed on the balance sheet instead of being written down. The auditor's opinion on 2024's internal controls was revised to adverse.^[36][37] The same day it announced Hunt County: about 264 acres near Wieland that a solar developer had bought in 2023 and brought to the company late in 2025, and which the county's commissioners learned about from a local newspaper.^[40] The purchase closed in the first quarter for about $233 million.^[42]At the May town hall in Lone Oak the company promised under 6,750 gallons of water a day, closed-loop cooling, and that it would pay all of its own power costs; residents asked about runoff, bills, light, and noise, and the paper noted promotional material claiming $135 million a year in tax revenue for a city the site is not in.^[43]

In April it set Pecos, its 300-megawatt Permian mine, on a path to 1.5 gigawatts of gross power through a “scalable behind-the-meter solution,” with the first data hall's footings already poured.^[41] In May it sold $3.3 billion of 7.75% senior secured notes and 2,385 bitcoin, and took a $266.5 million impairment on mining assets.^[42] On July 28 AMD agreed to lease more than 500 megawatts from 2027, with 185 at Pecos and 110 in Hunt County, expandable to 2.5 gigawatts, and received warrants in return.^[45] The second-quarter results the same day showed what the company now is: $136.7 million of colocation revenue against $21.5 million from mining, 437 megawatts billing, about 1.1 gigawatts leased, long-term debt of $4.3 billion, and a net loss of $1.16 billion on a $1.05 billion warrant mark.^[46]

What is its record with the grid and the state?

Thinner than the other companies in this wing, and mostly about what its load is classed as rather than what it says. No Core Scientific witness appears on the 2023 SB 1751 list or the 2025 SB 6 list; the company's policy voice in Austin is Carol Haines, its head of power and policy, who told a Tribune event in February 2025 that SB 6's backup-generation language needed clarity - “If the rules aren't clear, people won't come and they won't build.”^[29] It is among the Texas Blockchain Council's largest financial contributors, and Senator Cruz accepted the council's endorsement at the Denton facility in August 2024.^[55][56] Industry trackers list it among the miners that routinely curtail in ERCOT programs; in Winter Storm Fern in January 2026 tracked miners' output fell by more than half, though no Core Scientific figure has been published.^[54]

The Governor's August 2026 directive put the company on the record. It committed to his standards on August 10 - pay for its own power and infrastructure, cool with little water, work with communities - and the Governor announced the commitment on the 12th: “guardrails to ensure data centers protect our electric grid, conserve our water, respect our neighborhoods, and pay their own way.”^[47][48] ERCOT's audit of the roughly 300 projects in Batch Zero is due December 10.^[49] The company's September 10 filing is the clearest statement any Texas miner has made of where it sits: Denton's original 297 megawatts are base load under pathway (a), energized before March 2022, and outside Batch Zero entirely; 74 more were validated in 2025; Pecos's 300 existing and 300 new are conditionally approved inside the batch with collateral posted; Hunt County's 431 are advancing, with a stability study passed, collateral posted, long-lead equipment ordered, and construction begun.^[50] Base load is the word. The dimmer switch is not.

The honest counterweight: the ledger, the tax base, and the moratorium

Three things. First, the ledger. This is a company that went bankrupt once on customer defaults and has since borrowed $4.3 billion to build buildings for two tenants; its net income has been negative in five of the last six years, its 2024 accounts were restated, its auditor found a material weakness, and its chief executive's pay rose from $6.4 million to $9.0 million in the year the shareholders refused to be bought and registered, in the company's own words, “lower support” for the pay than it expected.^[37][39] Second, the tax base, which cuts the other way. Denton got what it was promised and more: the conversion added about $3 billion of certified assessed value, enough for the city to cut its tax rate from $0.595420 to $0.548485 per hundred dollars, and a council member said in September 2026 that the company was “carrying their weight”; the site has never had a noise case made against it, the closed cooling loop uses about what a large grocery store does, the company pays all of its own energy costs, and it has not asked for a megawatt beyond its contract.^[51][44][53] Third, the moratorium. On September 22 and 23, 2026 the same council that voted unanimously for the conversion held its first hearing on a ninety-day pause on new data centers, and all twenty residents who spoke supported it; the company has asked the utility about leasing more land to the south without saying what for - “They did not tell us what it's for” - and a council member observed that “we don't have longitudinal studies.”^[51][52][53] The second hearing is October 27 and a vote may come December 1.

The fair reading is that Denton made a good financial deal twice, first with a mine and then with its replacement, and gave up in the second deal the grid flexibility that had justified the first - and that the company, which has been through a bankruptcy, a restatement, and a shareholder revolt in four years, is now the most heavily indebted landlord in the Texas wing, with base-load status the state has yet to audit.

Where does Core Scientific stand today?

As of September 30, 2026: four Texas sites - Denton at 394 megawatts and outside Batch Zero, Pecos at 600 conditionally approved and pointed at 1.5 gigawatts, Austin at 20, Hunt County at 431 under construction; about 1.1 gigawatts leased to CoreWeave and AMD; $4.3 billion of debt; a net loss of $1.5 billion for the half-year on warrant marks; and a city council in Denton weighing a moratorium.^[50][46][51] The mine at Denton is gone; the sound the company makes now is a filing. The other companies in the wing are on Riot Platforms and Texas and MARA Holdings and Texas; the pivot itself is on the Texas miners' AI pivot; the grid's side is on ERCOT and Bitcoin; the sites are on the Texas Bitcoin mining map. This page is the dimmer switch Denton bought, and what it became.