Core Scientific Reports Drop in Q3 Revenue Amid AI Infrastructure Transition

Core Scientific, the prominent U.S.-based digital infrastructure company and a leading Bitcoin (BTC) miner, has disclosed a notable decline in revenue for the third quarter of its fiscal year 2025. The dip reflects the hurdles faced during the company’s transitional shift from traditional Bitcoin mining to artificial intelligence (AI)-focused infrastructure services.

Q3 Revenue Insights: Bitcoin Mining Struggles

Data released on October 25 confirms Core Scientific’s Q3 revenue stood at $81.1 million, marking a 15% decrease compared to $95.4 million in the same period last year. The primary driver behind the decline was a substantial 55% reduction in Bitcoin mining output, which led self-mining revenue to slide from $68.1 million to $57.4 million. Hosting services revenue further plummeted, dropping from $16.9 million to $8.7 million.

Interestingly, the average price of Bitcoin rose by an impressive 88% over the quarter. Nevertheless, this uptick failed to compensate for the severe decrease in mining volumes, and the expected revenue recovery remained out of reach.

Bright Spot: Growth in AI-Focused Colocation Services

Counterbalancing the drop in mining and hosting revenue, Core Scientific’s High-Density Colocation (HDC) segment demonstrated promising growth. The division reported a revenue increase from $10.3 million in Q3 2024 to $15 million in the same quarter of 2025. This incremental growth signals early success from the company’s strategic pivot toward AI-driven infrastructure solutions.

Analysts have called the HDC segment's growth a crucial component of Core Scientific's future, even though it currently represents a smaller fraction of the company's overall revenue. Despite these ongoing transitions, Core Scientific posted a gross profit of $3.9 million during the quarter—a stark improvement from the $200,000 loss it endured during Q3 last year.

Shifting Focus: Accelerating Progress in AI Infrastructure

Core Scientific has been undergoing sweeping changes to transition its focus from Bitcoin mining to AI infrastructure services. As part of these efforts, the company announced plans to repurpose a significant portion of its existing Bitcoin mining facilities to accommodate AI workloads. This shift underscores its aspirations to expedite revenue growth within the high-density colocation services sector.

While acknowledging the temporary revenue dip as an unavoidable part of the evolution, Core Scientific stated, “The recent decline in revenue is part of a strategic adjustment as we pivot toward AI and data center-focused services. We are focused on expanding the revenue share of high-density colocation services quickly.”

By realigning its business strategy, Core Scientific is positioning itself as a competitive leader in the bustling AI infrastructure market—a move analysts consider critical for long-term success amid fluctuating demand for crypto-mining services.

Uncertainty Surrounding CoreWeave Acquisition

While Core Scientific is making strides in transitioning to AI-focused solutions, uncertainties linger around its proposed $9 billion acquisition deal with rival AI infrastructure firm CoreWeave. Announced in July, the acquisition would involve a stock swap agreement. If completed, it would boost AI-related revenue share to over 70% of the combined entity’s total income, establishing it as a dominant force in the industry.

Nonetheless, the deal has provoked significant resistance from stakeholders. Proxy advisory firms have advised shareholders to reject the acquisition, citing Core Scientific’s independent success trajectory. Two key shareholders—Gullane Capital and Two Seas Capital—voiced firm opposition to the acquisition. Gullane Capital publicly stated, “We cannot support the deal under the current terms,” with Two Seas Capital echoing its concerns.

Core Scientific's shareholder meeting set for October 30 will provide clarity on the future of the acquisition. Until then, the company remains steadfast in its transition strategy as it races to become one of the leading AI infrastructure providers in an increasingly competitive and expansive market.

The Broader Implications of Core Scientific’s Transition

As Bitcoin prices remain volatile and mining profits fluctuate, Core Scientific’s pivot away from crypto-focused services reflects a broader trend among technology firms reevaluating their business models to capitalize on the growing demand for AI infrastructure. The company’s ability to adapt and redefine its competitive edge will likely play a pivotal role in outlining its future trajectory.

With the High-Density Colocation segment showing considerable promise and a shareholder vote potentially redefining corporate control, Core Scientific stands at a crossroads. Its strategic choices in the coming months will have far-reaching implications for its financial resilience, industry positioning, and ability to thrive in the transformative landscape of AI infrastructure.