Bernstein estimates Core Scientific's AMD processor partnership could generate $14 billion over 15 years

Core Scientific’s newly announced partnership with AMD is projected to generate approximately $14 billion in revenue over 15 years, with the chipmaker directly backstopping a portion of the arrangement, according to a Bernstein research note.

Authored by lead analyst Gautam Chhugani and published Thursday, the report breaks down the 530 megawatts of contracted capacity into two segments: a 377-megawatt lease executed directly with AMD under a triple-net structure, and a 152-megawatt lease to an undisclosed neocloud provider supported by AMD-backed credit.

This structure reflects a broader sector-wide shift identified by Bernstein, wherein semiconductor manufacturers increasingly underwrite long-dated leases to enable former Bitcoin miners to develop artificial intelligence infrastructure. Core Scientific (CORZ -0.06%) has announced 530 megawatts of colocation agreements, Hut 8 (HUT +6.19%) has secured 704 megawatts with a single tenant reportedly identified by the Financial Times as Nvidia, and AMD has separately reserved 200 megawatts with Riot Platforms (RIOT +3.12%).

In Bernstein’s analysis, mining operators act as landlords possessing approved grid connections and powered shells, while chipmakers leverage their investment-grade credit ratings to underwrite tenants seeking deployment space for high-performance compute. The brokerage’s analysts consider direct master leases with investment-grade tenants superior to prior models that depended on credit guarantees from corporate backers like Google. They argue these arrangements lower financing costs and mitigate counterparty risk relative to leases extending 15 to 20 years.

AMD’s equity compensation is explicitly tied to project execution, Bernstein noted. The chipmaker holds warrants to acquire 30 million Core Scientific shares at the prevailing market price of $23.47, with vesting contingent upon the partnership scaling to its full 2.5-gigawatt capacity. Bernstein views these so-called circular transactions—where semiconductor firms take equity stakes, warrants, or financial backstops in their own customers—as less aggressive than some critics suggest, particularly given compute demand that far exceeds the limited supply of powered facilities and available land.

Financially, the AMD arrangement yields approximately $0.9 billion in average annual revenue, equating to roughly $1.8 million per megawatt. Bernstein calculates this figure sits 5% to 25% below the $1.9 million to $2.4 million per megawatt typical of recent miner colocation contracts. However, the 377-megawatt triple-net lease to AMD operates at nearly 100% gross margins, with the firm estimating a blended EBITDA margin of approximately 96% across the overall deal.

Core Scientific has guided for capital expenditures between $11 million and $12 million per megawatt, implying total project costs of roughly $6 billion. Of that amount, approximately $1 billion has already been deployed, with the remainder slated for financing through project-level bonds.

Bernstein maintains an Outperform rating on Core Scientific with a $32 price target. The company has contracted approximately 1.1 gigawatts of IT load across its AMD and CoreWeave partnerships, leaving roughly 2 gigawatts of additional expansion potential under the AMD agreement. Meanwhile, the CoreWeave contract is progressing ahead of schedule, with 437 megawatts delivered as of mid-July against a total commitment of 590 megawatts scheduled for full delivery by early 2027.

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