Core Scientific's Q1 2025: Unraveling Contradictions on Revenue Share, Capacity Expansion, and Market Strategy

CoreWeave revenue share reduction, capacity expansion and timeline, HPC revenue and conversion timing, customer demand and diversification strategy, and international expansion are the key contradictions discussed in Core Scientific's latest 2025Q1 earnings call.



Strong Construction Pipeline and Milestones:
- Core Scientific achieved significant progress in its construction pipeline, with plans to deliver 250 megawatts of billable capacity for CoreWeave by the end of 2025, inclusive of Austin, and 590 megawatts by early 2027.
- The acceleration in construction milestones was driven by efficient execution and a strong strategic relationship with CoreWeave, which is funding most of the CapEx for these deployments.

Growing Demand for High-Density Colocation:
- Despite concerns about softening demand, Core Scientific reported strong sustained demand for high-density infrastructure, with a pipeline expanding to include a mix of hyperscale and large enterprise customers.
- The increase in demand is attributed to large enterprises realizing that existing infrastructure will not meet their performance needs as they adopt AI use cases.

Diversification in Customer Base:
- Core Scientific aims to have CoreWeave represent less than 50% of its billable capacity by the end of 2028, focusing on diversifying its customer base to include more hyperscale and large enterprise clients.
- This strategic move is driven by the need to balance capacity and ensure long-term strategic alignment, as well as the potential for large enterprises to represent anchor tenants at new locations.

Capital-Efficient Growth Strategy:
- Core Scientific's capital allocation strategy is focused on developing and expanding capacity at existing and new sites, with plans to utilize traditional project financing structures.
- This approach is enabled by CoreWeave's funding of the majority of CapEx associated with their deployments, providing a path for long-term shareholder value creation and reducing Core Scientific's capital burden.