Core Scientific Takes $41.9 Million Hit to Exit Block's Proto Bitcoin Miner Deal, Pivots Toward AI Data Center Infrastructure

Core Scientific said in its second-quarter regulatory filing that it paid $41.9 million to terminate a bitcoin mining equipment contract with Block and its Proto unit, booking an equal $41.9 million loss. The company canceled the agreement and scrapped all future equipment deliveries. The deal, announced in July 2024, called for Proto to supply 3-nanometer mining chips expected to deliver roughly 15 EH/s of hash rate, with options for additional purchases. Core Scientific said it will stop investing in new mining equipment to maintain or grow its hash rate. Instead, it plans to generate cash flow from its existing fleet and to sell or retire miners as appropriate. In the second quarter, the company's hosting revenue jumped to $137 million from $10.6 million a year earlier, representing 83% of total revenue. Self-mining revenue fell 66% year over year to $21.5 million, or 13% of total revenue. Core Scientific added that quarterly bitcoin production declined 53% from the prior-year period as it continues shifting power away from mining toward high-density computing systems such as GPUs.