DENTON, Texas — This article was originally published by our content partners at the Dallas Business Journal. You can read the original article here.
Three years after Core Scientific Inc. established what it called the first Bitcoin mining facility in Texas in Denton, the company is now converting the site into a data center to support artificial intelligence.
Core Scientific will invest an estimated $6.1 billion to convert the Bitcoin mining operation at 8171 Jim Christal Road, near what's known as the Denton Energy Center. Additional details are emerging about the major real estate and technology project in the wake of recent public meetings.
Denton City Council on Nov. 19 approved amendments to a power purchase agreement and land lease with the company. The city estimates the company's expansion will generate $194 million in property tax revenue for the city over 10 years. The City of Denton supplies its own electricity, so significant new users generate more revenue for its coffers.
Core Scientific (Nasdaq: CORZ), based in Austin, will lease 78.85 acres of city-owned land and build two on-site substations. In 2021, it made an initial deal with the city for its Bitcoin mining facility, which the company called the first in Texas.
Under the original agreement, Core Scientific leased about 31 acres of city-owned land and had access to 297 megawatts of power. With the new agreement, Core will lease 78 acres and expand its power access to 394 megawatts, according to the company.
"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, powering artificial intelligence," Adam Sullivan, Core Scientific CEO, said in a statement.
The company did not apply for incentives or abatements at the city level, according to a Denton announcement.
The data center is also expected to have office space. Once finished in 2027, the center could employ 300 people, with more independently supporting operations.
The city estimates the center would add more than $430 million to Denton's taxing bodies over 10 years.
"Denton’s trajectory is highly promising, and our expanding infrastructure makes the city an ideal hub for corporate investments," Denton City Manager Sara Hensley said in a statement. "As we grow, Denton is committed to responsible development that enhances our livability and provides opportunity for our educational institutions to serve as a workforce pipeline. This site will serve as a model for high-performing computing innovation."
Core Scientific was one of several cryptocurrency companies that filed for Chapter 11 bankruptcy in 2022 as crypto prices fell and energy prices rose. Core emerged from bankruptcy in January after getting court approval for restructuring. In its third-quarter earnings call, Chief Financial Officer Denise Sterling reported the company saw a $455.3 million net loss, compared with a net loss of $414.1 million during the same time period a year earlier.
Sterling mentioned sunsetting its Bitcoin mining business but also mentioned completing a 100-megawatt expansion at a West Texas mining center in Pecos. She also said the company is demolishing two data centers tapped for high-performance computing and has secured a $8.7 billion contract with cloud computing company CoreWeave Inc., which it previously rejected an acquisition offer from.
"We remain actively engaged in discussions with multiple potential clients regarding our newly available capacity and our growth plans," Sterling said. "These potential clients include hyperscalers and AI cloud providers."
