Core Scientific, Inc./tx (CORZ) Business

Item 1. Business

Overview

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale,

purpose-built data centers that support high-density colocation services and digital asset mining for both our own account and to a

lesser extent, third-party customers. Our data centers are optimized for power-intensive, mission-critical computing workloads, with a

focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications.

As of December 31, 2025, we owned or leased ten data centers across seven U.S. states, representing approximately 1.4

gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable customer power

capacity. A portion of these facilities were in operation as of December 31, 2025, with the remainder under construction or in various

stages of development.

Since its inception in 2017, Core Scientific has been focused on building and operating high-power, purpose-built data centers,

initially for digital asset mining and hosting third-party digital asset mining customers. The Company historically targeted sites with

abundant, reliable and cost-effective power, strong network connectivity, available land or existing buildings suitable for

redevelopment, attractive economic incentives, and access to utilities. In developing its facilities, the Company typically designed

powered shells and sufficient fiber connectivity to high performance data center standards, enabling flexibility to support increasing

power densities and evolving compute requirements over time.

In 2024, the Company announced its strategy to focus its data center infrastructure and expertise to the high-density colocation

compute business and in February 2024, entered into long-term contract with CoreWeave, Inc. (“CoreWeave”) to deliver 16 MW of

infrastructure at our Austin, Texas facility. In June 2024, Core Scientific announced that it had entered another contract with

CoreWeave for 200 MW of leased customer power capacity. Through the exercise of several contractual options during 2024 and into

early 2025, total leased customer power capacity under the relationship with CoreWeave increased to approximately 590 MW of

leased power capacity.

In 2025, we derived the majority of our revenue from earning digital assets for our own account but expect that a meaningful

amount of our revenue will be derived from high-density colocation (“HDC”) in 2026, as billable customer power capacity gets

delivered to our end customer. We intend to convert every megawatt in our portfolio to high-density colocation infrastructure over the

next three years, while continuing to digital asset mine during conversion only to meet existing power commitments at facilities where

HDC conversion is taking place or to honor a small number of digital asset mining hosting commitments. We are also actively

evaluating opportunities to acquire new sites, including land and power capacity, to expand our data center footprint beyond our

current portfolio.

Industry Background

We participate in the third-party colocation market, providing customers with access to purpose-built data center environments

that deliver secure physical space, reliable electrical power, cooling systems and facility operations required to support IT and

networking equipment. Customers deploy and manage their own hardware, while the operator designs, builds and operates the

underlying infrastructure needed to maintain uptime, power availability and cooling requirements. Customers often utilize third-party

colocation services as part of a broader infrastructure strategy to accelerate deployment timelines, expand into additional

geographic markets or optimize capital allocation, while retaining control over their hardware, software and data.

Within the third-party colocation market, providers offer wholesale, retail or hybrid colocation services, which differ primarily

based on contract size, deployment scale and customer profile. Our operations are primarily focused on wholesale colocation, which

typically involves large, long-term agreements with a limited number of customers, often with initial terms of 10 years or more for

dedicated suites, halls or entire buildings, with leased customer power capacity that can range from several megawatts to tens or

hundreds of megawatts per customer. Wholesale customers are commonly hyperscale cloud providers, AI and other HPC operators

and large enterprises with the operational capability to manage hardware and networking at scale.

Wholesale colocation agreements are commonly structured as either triple-net or modified gross leases, which differ in how

operating costs are allocated between the operator and the customer. Under a triple-net structure, the customer is generally responsible

for substantially all operating expenses associated with the leased space, including power, maintenance, taxes,  insurance and other

facility-related costs. Modified gross leases, by contrast, typically involve the operator retaining responsibility for certain facility-level

operating expenses, while the customer is billed separately for power and, in some cases, other variable operating costs. Both lease

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structures are frequently paired with long-term, take-or-pay contractual commitments, under which the customer is obligated to pay for

leased customer power capacity regardless of utilization, providing operators with revenue visibility over the contract term.

The colocation industry has evolved significantly in recent years, driven in particular by the large-scale deployment of

infrastructure to support AI and other HPC workloads. We expect demand for AI-focused compute resources to continue to grow

significantly as generative AI adoption accelerates and AI use cases expand across industries. These compute-intensive environments

require substantially higher rack power densities, specialized cooling technologies and access to large-scale, power capacity. As these

requirements continue to increase, demand is shifting toward operators capable of supporting high-density, accelerator-driven

workloads and delivering the associated power and cooling infrastructure at scale, trends that are expected to continue shaping the

industry.

Key Industry Trends

Significant increase in power density and infrastructure requirements driven by AI and HPC.

The rapid expansion of AI and other HPC workloads is driving materially higher infrastructure requirements across the

colocation industry. Traditional enterprise and cloud deployments have historically operated at rack power densities of approximately

5 to 15 kilowatts per rack, whereas AI and HPC workloads increasingly require 50 kilowatts per rack or more, with deployments

increasingly exceeding 100 kilowatts per rack. Supporting these higher-density environments requires substantially greater electrical

capacity, advanced cooling technologies and access to large, contiguous blocks of power, and introduces additional complexity in

facility design and construction. As a result, traditional data center designs optimized for air-cooled environments are often insufficient

for these workloads, and new developments increasingly incorporate liquid-cooled or hybrid cooling architectures.

These shifts place greater importance on operators with the technical, engineering and construction experience required to

design, build and operate high-density data center infrastructure at scale. For many years, our digital asset mining operations

have required the design, construction and operation of infrastructure capable of supporting high power density workloads, including

large-scale electrical deployments, specialized cooling systems and complex facility operations. These operations have involved

managing significant power loads, coordinating with utilities, and maintaining continuous operations across geographically distributed

facilities. We believe this experience provides relevant technical and operational expertise as we repurpose existing facilities and

develop new infrastructure to support AI-related workloads and high-density colocation services.

Evolving utility requirements and commercial terms.

In response to the significant increase in power demand driven by the continued proliferation of AI infrastructure, a

growing number of electric utility providers have adjusted their commercial and operational requirements, particularly in markets with

limited availability of incremental power capacity, where the pace of new generation and grid infrastructure development has not kept

up with demand from large-scale data center projects. As a result, utilities have implemented more structured and disciplined

commercial frameworks designed to better align power reservations with demonstrated project execution and load growth. These

measures increasingly include the requirement for significant collateral postings at contract execution, minimum monthly demand

commitments and other financial assurances as conditions to reserving and delivering large amounts of power capacity.

Utilities may also impose requirements related to phased load ramping, minimum utilization thresholds, capacity reservation

charges or demand-based metrics, including kilovolt-amperes-based or similar measures. In some cases, these practices are intended to

discourage speculative capacity reservations or “power banking” and to prioritize projects that demonstrate near-term readiness and

execution certainty. These evolving utility requirements can increase upfront costs, extend pre-construction timelines and add

complexity to power procurement, project planning and contracting for colocation providers and their customers, particularly in

markets with limited available capacity or constrained grid infrastructure.

Supply chain sourcing and availability of skilled labor play a key role in delivery timelines.

The development of large-scale data center infrastructure to support AI and other high-performance computing workloads is a

lengthy and complex process, with conventional large data centers typically requiring 18 to 24 months, or longer, from site selection

and permitting through construction and energization, excluding grid interconnection timelines. These timelines reflect the significant

upfront design and engineering work required to coordinate electrical, mechanical and cooling systems, as well as the scale of

construction and commissioning activities necessary to deliver power-intensive colocation infrastructure.

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We believe the procurement of long-lead-time electrical and mechanical equipment has become among the most significant

factors affecting delivery timelines for large-scale AI infrastructure deployments. Certain components, including high-voltage

transformers, switchgear, generators and advanced cooling systems, can require lead times of 12 to 18 months or longer, which can

materially affect data center construction schedules. In addition, demand for experienced data center contractors and specialized

subcontractors, including licensed electricians, engineers and commissioning professionals, has increased significantly across the

industry in recent years. As a result, while the ability to secure large amounts of power capacity is often viewed as a primary

bottleneck, we believe extended equipment lead times and skilled labor availability are likely to play an increasingly important

role in determining data center construction timelines over the coming years.

Data Center Portfolio

As of December 31, 2025, we owned or leased ten data centers in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1),

North Dakota (1), Oklahoma (1), and Texas (3) totaling 920 MW of total leasable customer power capacity, or 1.4 GW on a gross

utility power capacity basis.

Business Operations and Segments

We have three operating segments: “Colocation,” consisting of providing high-density colocation services to third parties for

AI / HPC operations, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, and “Digital

Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining. Prior to April 1, 2024, we

operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. During fiscal year 2024, our

“Colocation” segment was referred to as “HPC Hosting.”

We derived the majority of our 2025 revenue from earning digital assets for our own account but expect to rapidly increase

revenue derived from high-density colocation (“HDC”) as capacity gets delivered to our existing and future end customers. We intend

to convert every megawatt in our portfolio to HDC infrastructure over the next three years. Our Colocation segment provides space,

power, cooling, facilities operations, security and other services to third-party customers to support workloads for machine learning

and artificial intelligence. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on

a recurring basis. HDC colocation leases may include all or portions of a data center, where customers may also lease office space to

support their colocation operations where revenue is primarily based on power usage as well as square footage.

Our Digital Asset Self-Mining segment generates revenue from the deployment and operation of our own large fleet of

specialized computers, or “miners” within our owned digital infrastructure as part of a pool of users that solve complex cryptographic

algorithms to validate transactions conducted on one or more blockchain networks. In the Bitcoin network, solving a block results in a

reward of bitcoin in a process known as “mining.” These rewards of bitcoin currently can be sold profitably when the sale price of

bitcoin exceeds the cost of mining, which generally consists of the cost of mining hardware, the cost of the electrical power to operate

the machine, and other facility and overhead costs associated with housing, operating and supporting the equipment.

Our Digital Asset Hosted Mining segment generates revenue through the sale of electricity-based consumption contracts for our

hosting services, which are recurring in nature. Our Digital Asset Hosted Mining operation segment provides a full suite of services to

our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our

customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary

for our customers to operate, maintain and efficiently mine digital assets. We do not expect to further expand our Digital Asset Hosted

Mining operations in 2026 and future years and may not derive consequential digital asset hosting revenue in future periods.

Suppliers

Power Providers

We have fixed, variable and interruptible bi-lateral power supply consumption agreements with electric power suppliers at our

various facilities. These agreements provide for both firm and interruptible power supply through each provider’s transmission and

distribution systems to dedicated substations owned by the power provider, the local utility or the Company. We value our

relationships with our power providers and work to leverage our operating capabilities to take advantage of any interruptible programs

and cost saving opportunities.

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The table below summarizes the gross utility power capacity in MW by facility location and electric utility provider as of

December 31, 2025:

Facility Development

Our experienced in-house facility development teams, utilizing from time to time the expertise of third parties, focus on

sourcing, evaluating, designing, engineering, and developing the facilities where we host our customers’ HPC colocation needs and

facilities where we earn digital assets, primarily bitcoin, through self-mining. We primarily engage third-party contractors to construct

our facilities according to our design specifications.

Mining Equipment

Our mining operations rely on specialized digital asset mining hardware equipped with ASIC chips ("ASICs") designed to solve

cryptographic hashes for blockchain networks using the SHA-256 algorithm. Historically, we have sourced substantially all of our

miners from Bitmain Technologies Limited (“Bitmain”), one of the leading manufacturers of digital asset mining equipment. In 2024

we entered into an agreement with Block, Inc. a technology company developing ASICs, to acquire 3 nm ASICs customized for

digital asset mining.

As of December 31, 2025, we deployed approximately 151,400 bitcoin miners, which number consists of approximately

135,500 self-miners and approximately 15,900 hosted miners, which represented 15.7 exahash per second (“EH/s”) and 2.2 EH/s for

self-miners and hosted miners, respectively. As of December 31, 2024, we deployed approximately 171,100 bitcoin miners, which

number consists of approximately 164,000 self-miners and approximately 7,100 hosted miners, which represented 19.1 EH/s and 1.0

EH/s for self-miners and hosted miners, respectively.

Competition

Each of the HDC and bitcoin mining markets are highly competitive.

In the HDC market, we compete with numerous established data center providers, including both public and private companies

such as:

•Aligned Data Centers;

•Compass Datacenters;

•Equinix, Inc.;

•Digital Realty Trust;

•NTT;

•QTS;

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•Switch, Inc.;

•Vantage Data Centers; and

•CyrusOne Inc.

Many of these competitors are more established, have better brand recognition, are well capitalized, and are organized to take

advantage of certain tax benefits for their investors, lowering their external cost of capital. Many of our competitors seek to establish

data centers in the same geographic regions as we do and compete for the same sources of power, equipment and customers as Core

Scientific. Competitors compete on price, facility location, reputation and perceived skill with respect to performance. We believe that

our experienced data center and engineering leadership team, our proven ability to rapidly deliver scalable, purpose-built data centers,

combined with cutting-edge, energy-efficient technologies, will enable us to compete favorably within the HDC market.

Additionally, we compete with other digital asset miners who have signed contracts with AI / HPC customers to convert

existing digital mining facilities into HDC facilities including:

•Applied Digital Corporation;

•Cipher Mining Inc.;

•Galaxy Digital;

•Hut 8 Corp.;

•IREN; and

•Terawulf, Inc.

Our digital asset self-mining operations compete globally with other mining operations throughout the world to complete new

blocks on the blockchain and earn the reward in the form of bitcoin. We compete on the basis of our total number of miners, the hash

rate we are able to consistently generate, the size and skill of the mining pool through which we participate and the efficiency of our

miner and mining operations. Our mining operations also compete with non-digital asset operations for access to suitable real estate

and access to affordable and dependable electric power.

Our hosting activities compete with a large number of other hosting operations. Our success in our hosting operations depends

on our ability to supply hosting space and power, our performance with respect to installation, operation and repair of customer

equipment, our ability to obtain replacement parts, the value of our service offering to our customers and the availability of mining

equipment.

In both our self-mining and hosting activities, we additionally compete with other operations and participants for equity and

debt financing since our business is capital intensive.

Several public companies (traded in the United States, Canada, and internationally), such as the following, may be considered

self-mining and hosting competitors to the Company:

•Applied Digital Corporation

•Bit Digital, Inc.;

•Bitfarms Ltd.;

•Cipher Mining Inc.; and

•CleanSpark, Inc.

Human Resources

As of December 31, 2025, we had 325 full-time employees. All of our employees are located in the United States in 26 states.

We may also engage consultants and contractors from time to time to supplement our regular full-time workforce on an as needed

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basis. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not

experienced any work stoppages.

Our mission and values are the foundation for our Company culture. More specifically, our mission is to accelerate digital

innovation by scaling high-density computing rapidly, efficiently, and responsibly. As for our values, they include: (1) operating with

integrity and maintaining the highest standards, and supporting each other as a single team, to ensure our collective success (“Team

First”); (2) acting as owners of the business, in the interest of all stakeholders, holding ourselves and each other accountable for our

actions and outcomes (“Extreme Ownership”); (3) relentlessly seeking to accelerate the world’s digital transformation and improve the

way we do business to reduce costs, improve quality and grow (“Innovate & Simplify”); and (4) seeking to maximize transparency

with all our stakeholders to ensure understanding, alignment and constructive dialog (“Transparency”). Our mission and values reflect

who we are and the way our employees interact with one another, our customers, partners, and shareholders. Working together and

guided by our mission and values, we are committed to creating a company where employees have the opportunity to advance their

careers and make a difference in our business performance.

Core Scientific works diligently to attract and retain the best available talent in both the data center space as well as functional

experts from a wide range of industries and sectors. We offer competitive base compensation, performance-based annual incentives,

equity at certain levels and benefits offerings to create a compelling employment proposition. Along with our performance focused

culture and team first mentality, Core Scientific has created a best in class destination for talented employees.

Intellectual Property

We seek protection for our intellectual property as appropriate. To establish and protect our proprietary rights, we rely upon a

combination of patent, copyright, trade secret and trademark laws and contractual restrictions such as confidentiality agreements,

licenses and intellectual property assignment agreements.

We have filed over 130 patent applications in technologies such as blockchain, data center management, infrastructure and

cooling. The patent applications have been filed in the United States and in certain locations outside the United States. A subset of the

patent applications have issued as patents. We maintain a policy requiring our employees, contractors, consultants and other third

parties to enter into confidentiality and proprietary rights agreements to control access to our proprietary information. These laws,

procedures and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated,

circumvented, infringed or misappropriated. Furthermore, the laws of certain countries do not protect proprietary rights to the same

extent as the laws of the United States, and we therefore may be unable to protect our proprietary technology in certain jurisdictions.

Moreover, our platform incorporates software components licensed to the general public under open-source software licenses. We

obtain many components from software developed and released by contributors to independent open-source components of our

platform. Open-source licenses grant licensees broad permissions to use, copy, modify and redistribute those open-source components

of our platform. As a result, open-source development and licensing practices can limit the value of our software copyright assets.

We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations

outside the United States. To protect our brand, we file trademark registrations in some jurisdictions.

Government Regulation

Government regulation of large-scale data center operations continues to evolve in the United States. Multiple federal and state

regulators have expressed interest in oversight of data center infrastructure, AI and other HPC applications, and the energy-intensive

computing activities associated with large-scale data center operations.

Federal agencies have increased scrutiny of energy use by large-scale data center operators. Future regulatory action related to

the energy usage of data center operations, including possible reporting or operational requirements, could affect our colocation

activities.

In July 2025, the President signed an executive order titled “Accelerating Federal Permitting of Data Center Infrastructure,”

which directs federal agencies to streamline permitting and environmental review for large-scale AI data center projects requiring

more than 100 megawatts of new electrical load. The executive order also directs the Departments of the Interior, Energy, and Defense

to authorize data center construction on appropriate federal lands, and instructs the Secretary of Commerce to launch an initiative to

provide financial support for qualifying projects. While this executive order may benefit our colocation operations by reducing

permitting timelines for future expansion, the scope and durability of these measures remain uncertain and subject to change.

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State level regulation of large-scale data center operations is also developing. In June 2025, Texas enacted Senate Bill 6, which

introduces significant new requirements for large-load electricity customers, including data centers within the Electric Reliability

Council of Texas (“ERCOT”) region. SB 6 applies to customers with loads exceeding 75 megawatts at a single site and requires such

customers to contribute to transmission interconnection costs, disclose duplicative interconnection requests, and maintain backup

generation or load curtailment capability during grid emergencies. Facilities interconnecting after December 31, 2025 must install

remote-disconnect equipment to enable ERCOT-directed load shedding during grid stress events. The Public Utility Commission of

Texas is required to review and potentially revise the methodology for allocating wholesale transmission charges to large-load

customers by December 31, 2026.

Oklahoma’s HB 3594, effective November 2024, requires that any regulations imposed on digital asset mining businesses also

apply to traditional data centers and prohibits discriminatory electricity rates for such operations. This legislation supports our facility

under development for colocation services in Muskogee, Oklahoma.

Kentucky’s expanded data center incentive program, enacted through House Bill 775 in 2025, broadened eligibility for sales

and use tax exemptions on qualified data center equipment statewide based on county population thresholds.

In Georgia, the Public Service Commission adopted a rule in January 2025 allowing Georgia Power to impose minimum billing

requirements, longer contract terms, and site-specific cost allocations on new large-load customers exceeding 100 megawatts,

including data centers. In December 2025, the Georgia PSC approved approximately 9,885 megawatts of new generation capacity,

driven largely by projected data center demand, with conditions requiring large-load customers to bear a significant share of associated

infrastructure costs.

In other locations where we operate, including North Carolina, North Dakota, and Alabama, no state statute presently restricts

data center operations, although state commissions and local zoning authorities continue to evaluate rules applicable to large electricity

load facilities and data centers. These state level developments may increase our compliance obligations, affect economic terms for

power, or restrict siting or loading of our colocation operations.

Regulatory frameworks include environmental requirements, zoning and land use considerations, cybersecurity expectations,

and requirements related to data privacy. These obligations may increase over time as governments respond to growth in data center

activity and increasing demand for power.

The effect of future regulatory changes at the federal or state level is difficult to predict. Any such changes could materially

affect our operations, energy costs, customer demand, or the profitability of colocation activities.

Environmental

The effects of human activity on global climate change have attracted considerable public and scientific attention, as well as the

attention of the United States and other foreign governments. In general, efforts are being made by government regulators and others

to reduce greenhouse gas emissions, particularly those from coal combustion power plants. Some of these plants may be those our

operations rely upon for power. In addition, there are increasing concerns over the quantity of energy, particularly from non-renewable

sources, used for bitcoin mining and its effects on the environment (with lesser recognition for any positive contributions by bitcoin

mining to the operation of existing electrical grids and systems).

While the nature or effect on the Company of any environmental regulatory changes by federal, state, local or foreign

governments or self-regulatory agencies is impossible to predict, the added cost of any environmental taxes, charges, assessments or

penalties levied on power plants we rely upon could be passed on to us, increasing the cost to run our facilities. If environmental laws

or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance

requirements on our operations, our business, capital expenditures, results of operations, financial condition and competitive position

could be materially adversely impacted.

Seasonality

The Company’s colocation operations can be affected when extreme temperatures in locations where its data centers operate

result in local power price volatility that necessitates economic or grid stabilization-driven curtailment. Our data centers are equipped

with backup generators designed to support critical facility infrastructure in the event of a power outage or curtailment.

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Peak demand periods, which typically occur during summer and winter months, may result in elevated power prices or grid

constraints that affect the availability or cost of power at our data centers.

Grid operators may direct mandatory curtailment of large-load customers during grid emergency events. In certain jurisdictions

where we operate, including Texas, regulatory frameworks require large-load facilities to comply with mandatory load reduction or

remote disconnection instructions issued by the grid operator during periods of extreme grid stress. We would comply with any such

mandatory curtailment directives and utilize backup generators designed to support critical facility infrastructure. With respect to our

colocation operations, mandatory curtailment events directed by a grid operator are force majeure events under our customer

agreements.

Corporate Information

Our principal executive offices are located at 838 Walker Road, Suite 21-2105, Dover, Delaware 19904, and our telephone

number is (512) 402-5233. Our corporate website address is www.corescientific.com. Information contained on or accessible through

our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report on Form

10-K is an inactive textual reference.

Available Information

We currently make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy

reports and all amendments to those reports available free of charge on our website at www.corescientific.com as soon as reasonably

practicable after we file such reports with, or furnish such reports to, the SEC. The SEC maintains an internet site that contains reports,

proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The

information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing,

and references to such website addresses are intended to be inactive textual references only.