NEW YORK, July 28, 2026 – Core Scientific (NASDAQ:CORZ) saw its shares decline 2.7% to $20.17 in late-morning trading on Tuesday, reversing an earlier premarket gain of about 5%. The pullback came as investors digested the details of a massive artificial intelligence infrastructure agreement with Advanced Micro Devices (NASDAQ:AMD), shifting focus from the headline $14 billion figure to potential dilution and counterparty risks.
Deal Structure and Key Details
The agreement involves approximately 530 megawatts of capacity, with AMD directly leasing 377 megawatts across three data center locations. An undisclosed neocloud tenant accounts for the remaining 152 megawatts, representing about 29% of the initial allocation. According to an SEC filing, AMD received warrants to purchase up to 30 million shares of Core Scientific at $23.47 per share, with 6.5 million shares already vested. This warrant overhang, representing roughly 9.4% of outstanding shares as of June 30, has been a key concern for investors.
The deal also includes an option for AMD to reserve an additional 1,925 megawatts through December 28, 2028, potentially expanding the total to 2.5 gigawatts. Exercising all warrants for cash would generate approximately $704 million in proceeds for Core Scientific, based on the company's 319.6 million shares outstanding.
Revenue and Concentration Benefits
The new package accounts for nearly 48% of Core Scientific's reported 1.1 gigawatts of leased capacity but delivers around 58% of the minimum contract value, suggesting higher revenue per megawatt compared to existing agreements. Base lease terms are set at 15 years, with three five-year extension options, and customer installations are expected to begin in 2027.
The deal also helps reduce customer concentration risk. Currently, all of Core Scientific's colocation revenue comes from CoreWeave (NASDAQ:CRWV), which accounted for 83% of total revenue in the second quarter. The AMD agreement diversifies the revenue base, though it introduces indirect counterparty risk through the neocloud tenant.
Financial Performance and Risks
Core Scientific reported strong second-quarter results, with revenue climbing 109% to $164.2 million. The colocation segment generated $136.7 million, or 83% of total revenue. Adjusted EBITDA rose to $41.1 million from $28.5 million a year earlier. However, capital expenditures totaled $797.5 million, nearly five times revenue, highlighting the capital-intensive nature of the business. The company posted a net loss of $1.16 billion, primarily due to non-cash adjustments in warrant values related to a higher share price. Operating cash flow was positive at $230.9 million in the first half, while cash used in investing activities reached $1.18 billion.
Notably, the Hunt County and Muskogee AMD lease locations lack the customer-financed arrangement seen with previous CoreWeave conversions, exposing Core Scientific to fluctuations in construction costs and equipment price increases. Available liquidity stood at $1.82 billion, with long-term debt of $4.30 billion.
Market Context and Outlook
AMD shares also fell 6.6% to $462.27 in late-morning trade, reflecting broader weakness in the chip sector rather than the specific deal. Mathew Hein, AMD's chief strategist, stated the collaboration will “expand access” to critical AI infrastructure, while Core Scientific CEO Adam Sullivan said the deal would “support AMD’s technology roadmap.”
Risks remain, including revenue not starting until 2027, subject to construction, electricity, permitting, and customer credit factors. Additional warrant vesting could further dilute existing shareholders. Tuesday's market move suggests that while the deal provides a more robust revenue composition and reduces reliance on CoreWeave, it also introduces significant construction expenses, indirect counterparty risk, and potential dilution that investors are still weighing.
