Core Scientific Locks In $14 Billion AMD Contract, Unlocking a Path to 2.5 Gigawatts While Protecting Equity From Step-In Risk
Q2 2026 earnings call, July 28, 2026 — company details economics and financing of its largest deal to date
Core Scientific used its second-quarter earnings call to unveil a commercial partnership with AMD that CEO Adam Sullivan called "truly a one-of-one type partnership in this market," and the numbers back up the rhetoric. The initial agreement covers 530 megawatts across five campuses — Pecos, Hunt, Muskogee, Auburn and Dalton — under 15-year contracts carrying 2.5% annual escalators and representing more than $14 billion of base contracted revenue. Layered on top is an exclusive reservation right for AMD to lease up to an additional 2 gigawatts, a structure management believes could turn this into a 2.5-gigawatt relationship over time.
The deal splits into two distinct pieces. Roughly 380 megawatts across Pecos, Hunt and Muskogee go directly to AMD under a triple net lease. The remaining approximately 150 megawatts at Auburn and Dalton will serve a Neocloud customer through a modified gross lease, but critically, AMD is providing full credit support across the entire 15-year term. That backstop fully leases out both the Auburn and Dalton campuses. Sullivan emphasized that unlike some competing transactions in the market, "the credit support agreements do not include any equity step-in rights," a structural point management flagged repeatedly as protecting Core Scientific's equity investment. AMD also received a warrant struck at current market levels, vesting on commercial milestones — a small but notable alignment mechanism baked into the partnership.
Execution, Not Just Announcements, Is the Differentiator
Management leaned hard into the idea that the market is shifting from rewarding deal announcements to rewarding delivery. Core Scientific said it is now billing for 437 megawatts of capacity, ahead of schedule, up nearly 200 megawatts from the end of the first quarter. Chief Operating Officer Matt Brown noted that four of the five CoreWeave campuses were substantially completed ahead of the "end of summer" target management had set on the prior call, with only Dalton Phase 2 (150 megawatts) remaining, on track for early 2027. Sullivan framed this operating history as the reason AMD chose Core Scientific over other developers with greenfield land banks: "We have bodies moving on site, walls going up... This is a unique situation compared to others who are announcing deals with greenfield." The CoreWeave relationship itself is cited as the template — starting as a 16-megawatt lease in 2024 and expanding to 590 megawatts today.
With the AMD deal added, Core Scientific's total contracted billable capacity now stands at approximately 1.1 gigawatts, representing more than $24 billion of base contracted revenue — a figure that roughly doubles the company's backlog value in a single announcement.
Build Costs Land at $11-12 Million Per Megawatt, Rising From CoreWeave-Era Levels
For the first time, management gave investors a granular breakdown of what it actually costs to deliver a billable megawatt of AI infrastructure — construction labor and on-site execution, owner-furnished equipment such as transformers, switchgear, generators and liquid cooling, and soft costs including engineering, permitting and utility interconnect. Blended across the portfolio, Brown pegged current costs at $11 million to $12 million per megawatt, up from levels embedded in the earlier CoreWeave buildout. Asked directly what is driving the increase, Brown pointed to labor scarcity as the dominant factor: "Labor is very scarce in a number of markets across the U.S. A lot of the electrical subcontractors, the large ones, and a lot of the mechanical trades are just pretty saturated with work right now." Tariff-driven equipment cost inflation and design differences between the CoreWeave and AMD-optimized builds also contributed.
At that cost basis, the initial 530-megawatt AMD build will require approximately $6 billion of capital, which the company plans to finance predominantly through project-level bonds, mirroring the SPV structure used for CoreWeave. CFO Jim Nygaard said the company ended the quarter with $1.8 billion of liquidity and is prepared to spend up to roughly $1 billion of its own capital to advance about 500 megawatts of speculative capacity ahead of future customer contracts — the same "invest ahead of demand" playbook that positioned it for AMD in the first place. On financing conditions, Sullivan acknowledged rate volatility in the broader bond market but said an investment-grade counterparty like AMD keeps investor appetite intact: "If you were signing a contract with anyone outside of kind of this tier of credit, there's question marks about capital raising."
Behind-the-Meter Power Becomes the Next Growth Lever
Roughly 1.5 gigawatts of the AMD reservation capacity is expected to come from behind-the-meter solutions rather than grid interconnection, and management gave unusually specific detail on how far along that planning is. At Pecos and Muskogee, the company is already in "advanced conversations with natural gas suppliers," has completed preliminary lateral pipeline planning, and is working with generation equipment vendors. Brown said the technology choice — reciprocating engines, linear generators or fuel cells — will vary site by site depending on local geography and supply chain availability. This behind-the-meter buildout, alongside a newly disclosed pipeline of more than 2 gigawatts of additional powered land (with the recent Hunt County, Texas acquisition cited as the template), signals Core Scientific is shifting from a company that converted Bitcoin-mining power into colocation capacity to one actively originating new grid and off-grid power for the next cycle, with initial availability targeted from late 2028 through 2030.
Bitcoin Mining Wind-Down Continues on Schedule
The legacy mining business continues to shrink as expected: miners online fell nearly 30% sequentially, and the company is now self-mining at only two sites, with management reiterating that mining exists primarily to offset contractual power costs during the transition. Second-quarter GAAP colocation revenue rose sharply to $137 million as the CoreWeave leases ramped, though Nygaard cautioned that straight-line GAAP lease accounting pulls future escalators forward, inflating reported margins relative to cash economics. Cash SG&A came in around $36 million, elevated by one-time financing fees, with management guiding to a "low $30 million" quarterly baseline going forward.
Demand Backdrop Still Outstripping Supply, Management Says
Pushed on where deal-making stands across the sector, Sullivan pushed back on any narrative of AI infrastructure demand cooling, arguing that GPU orders are outpacing available data center space: "There's a lot of GPUs sitting on the ground, and those GPUs still need to be plugged in." He expects the capacity crunch to intensify and more large-scale contracts to be signed across the industry before year-end. Management declined to disclose whether AMD was an existing negotiating counterparty from a previously disclosed set of exclusive talks that had reportedly lapsed a quarter earlier, calling the AMD relationship a "long-term" courtship built on due diligence into Core Scientific's execution track record and equipment procurement rather than a fast-moving transaction.