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Core Scientific's Q1 2026 earnings highlight a massive strategic shift toward AI infrastructure. The company closed a landmark $3.3 billion project bond financing, leveraging its CoreWeave contract to fund a $2 billion CapEx plan for 2026. Core Scientific has delivered 243 MW of billable capacity to CoreWeave, with a path to 590 MW by 2027. Expansion plans are ambitious, aiming for 1.5 GW campuses in Pecos, Texas, and Muskogee, Oklahoma, utilizing a mix of grid and behind-the-meter gas-powered solutions. Management reported that colocation revenue now covers operating costs, prompting an upward revision of gross margin targets for contracted sites to 80-85%. While an exclusivity agreement with one hyperscaler expired, management noted immediate re-engagement from three others, signaling high demand for 2027 RFS dates. The company is strategically transitioning away from Bitcoin mining, which is expected to be phased out at most sites by year-end. By investing ahead of contracts and securing long-lead equipment, Core Scientific aims to meet the urgent 12-to-14-month delivery timelines required by the current AI market, positioning itself as a differentiated, large-scale infrastructure partner.

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Core Scientific, Inc.: The High-Stakes Pivot from Mining to AI Colocation Amidst Negative Equity

Full Earnings Call Transcript — Q1 • 2026-05-06

Operator: Greetings. Welcome to the Core Scientific Fiscal First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Jonathan Charbonneau SVP, Investor Relations. Please go ahead, sir.
Jon Charbonneau: Great. Thank you. Good afternoon, and welcome to Core Scientific's First Quarter 2026 Earnings Call. Before we begin, I need to remind you that statements made on this call other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Words such as anticipates, estimates, expects, intends and believes and similar words and expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ substantially. For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's reports on Form 10-Q and 8-K filed today with the SEC and the press release and slide presentation contained therein. The forward-looking statements we make today speak as of today, and we do not undertake any obligation to update any such statement to reflect events or circumstances occurring after today. Today's presentation is available on our website, investors.corescientific.com. The content of this conference call contains information that is accurate as of today, May 6, 2026. Joining me today from Core Scientific are our CEO, Adam Sullivan; Chief Operating Officer, Matt Brown; and Chief Financial Officer, James Nygaard. We will conduct a question-and-answer session after management's remarks. We will now begin with remarks from Adam.
Adam Sullivan: Good afternoon, everyone, and thank you for joining us. [Audio Gap] for platform designed to support the most demanding compute workloads in the market. Over the past year, we've translated that strategy into execution, delivering high-density capacity at scale across multiple states. Those sites were an important starting point, but our first customer was never Core Scientific's full story. Delivering these initial sites enhances our operating credibility and provides a significant capital foundation we need to scale meaningfully from here. We have shown clearly our ability to deliver at scale. Across five sites, we are now developing one of the largest multisite AI infrastructure build-outs in the market. We are now earning revenue on approximately 245 megawatts with another 200 megawatts expected to be earning revenue in the coming months. Our execution, combined with the favorable structure of our CoreWeave contracts has enabled our next phase of growth. Today, we closed on a $3.3 billion capital raise supported by that contract with the proceeds to be used for future growth and the development of projects for other customers. The fact that we have five facilities fully leased and financed by our tenant is a meaningful differentiator. We have the ability to push the next phase of development in a disciplined way by securing the land, labor and equipment to protect timelines and accelerate delivery. As these new projects are leased, we expect opportunities for further financing to continue the cycle of our forward development go-to-market strategy. Our next phase of development has already begun. And late last year, we committed existing cash on hand to purchase equipment for our other existing sites. With the new secured financing, we are now accelerating development activity across multiple sites, including Pecos, Muskogee, Hunt, Dalton Phase III and Auburn. This positions us differently in the market. We are not waiting for deal negotiations to conclude before advancing sites. With capital in place, we can move early, bringing RFS timelines within the 12- to 14-month time frame that customers are actively trying to solve for. We are also scaling our campuses in a repeatable way. Today, we announced a path to approximately 1.5 gigawatts at Muskogee, closely following a similar plan at Pecos. A key enabler of that scale is power strategy. Customers are increasingly focused on solutions beyond existing grid capacity, including behind-the-meter options. We are proactively positioning our sites to support those needs, including efforts to secure natural gas infrastructure where appropriate to enable future expansion. Pecos is a clear example. We are actively converting the site from Bitcoin mining to high-density colocation with construction already underway and a pathway to RFS within 12 months. Muskogee is another. We see a path to 1.5 gigawatts of gross power supported by grid expansion, the Polaris acquisition and behind-the-meter solutions, and we expect to deliver additional data center capacity outside of our current contract in late 2027. Stepping back, we are executing a repeatable model, secure strategic sites, invest ahead of contracts where appropriate and, create assets that are increasingly compelling as they approach readiness. That brings me to our commercial progress. We are engaging customers from a position of strength because development is already underway, our timelines are not dependent on contract timing, an important distinction in this market. As we previously discussed, we are engaged in an exclusivity process with a hyperscaler across Pecos and Muskogee. That exclusivity has now expired. However, three hyperscalers immediately engaged on those same sites, and we are now in active discussions. This reinforced both the strategic value of these assets and the depth of demand for large-scale high-density capacity. It also informed how we approach exclusivity going forward. While it likely remains a necessary part of some deal negotiations, it must also include clear milestones. In a market like this, we will not keep high-value assets off the market longer than necessary. More broadly, our conversations with potential customers have increased significantly since the beginning of the year. Hyperscalers remain our primary focus, and we are also seeing growing engagement from chip makers, AI labs and Neo-cloud providers. These emerging customer segments represent meaningful opportunity, though they often require additional credit support. We are actively working with customers and financing partners on structures that can support long-term financeable commitments. Stepping back, our position is clear. We are building a scaled, high-density digital infrastructure platform with a diversified site portfolio. We are deploying capital to secure timelines and accelerate delivery. We are also seeing strong customer demand. Based on our execution, capital position and commercial momentum, we are confident in our ability to continue expanding and creating long-term value for our customers and our shareholders. With that, I'll turn the call over to Matt Brown to provide more details on our operations and development progress. Matt?
Matt Brown: Thanks, Adam. As we reflect on the first quarter, our operational priorities remain clear: execute on our existing build pipeline, bring capacity online efficiently and position the business for the next phase of large-scale expansion. Demand for high-performance compute infrastructure remains strong, and we have focused on aligning our delivery timelines, supply chain readiness and power strategies to meet that demand. I'll begin with an update on our CoreWeave dedicated facilities, where we continue to execute at pace and at scale. Today, I am pleased to announce that we have delivered 243 megawatts of billable capacity to CoreWeave. This includes a milestone with the full turnover of both our Marble, North Carolina and Dalton, Georgia Phase I data centers. At Marble, we completed construction and successfully transitioned the entire facility into operations, bringing 65 megawatts of billable capacity online. At Dalton Phase 1, we likewise achieved full site handover and delivery 30 megawatts into service. These milestones reflect the team's ability to execute efficiently at scale, transition assets seamlessly from construction to revenue generation and consistently aligned to customer timelines, all of which remain critical as we continue to move forward. Across our remaining contracted sites, we will continue delivering billable megawatts over the coming months while scaling execution on the CoreWeave contract, positioning us to deliver more than 450 billable by the end of the summer, while remaining on track to deliver the full 590 megawatts by the early 2027. Now turning to our non-CoreWeave developments, where we are advancing our development strategy. Our Pecos, Texas campus is one of our most significant development opportunities with a plan to scale from 300 megawatts to 1.5 gigawatts through a multipronged expansion strategy. At the core is our power road map. We've secured an additional 300 megawatts and are advancing a mix of grid-connected and behind-the-meter solutions to support long-term growth. The behind-the-meter strategy leverages low emission generation and concludes the construction of a linear gas pipeline to the campus. Together, these efforts are designed to accelerate time to power, enhance resilience and reduce supply chain risk while enable us to meet hyperscale demand. In parallel, construction of our initial 431,000 square foot 185-megawatt facility is progressing from civil work into foundation phases with precast walls arriving for vertical construction. All long lead items equipment has been secured, helping reduce execution risk and support timelines. We are also advancing infrastructure for high-density colocation, including redundant fiber capacity and a new regional interconnect point in Midland, Texas, linking back to the Pecos campus. At our Muskogee, Oklahoma campus, today, we announced plans for the expansion of the site to 1.5 megawatts of gross power or approximately 1 gigawatt of leasable capacity. Similar to Pecos, this expansion will leverage a combination of behind-the-meter infrastructure and utility supply power, including the roughly 440 megawatts acquired through the Polaris transaction with our general contractor already secured on site, and we have begun development of the first 82.5megawatt building with initial delivery expected in the second half of 2027. And finally, turning to other development sites, Hunt County, Texas, Dalton, Georgia Phase III and Auburn, Alabama, each continue to advance through preconstruction milestones and remains on track to meet their initial delivery timelines. In closing, as we look ahead, we remain confident in our ability to execute against our commitments and capture opportunities in front of us. The combination of strong demand, a growing portfolio of scale developments and continued progress on our power infrastructure strategy position us well for the quarters ahead. With that, I'll turn it over to Jim.
Jim Nygaard: Thanks, Matt. During the first quarter, we reached an important inflection point as our colocation revenue scaled to a level sufficient to cover operating costs and begin expanding margins. This marks a meaningful milestone in our transition with colocation now becoming an important driver of our overall financial profile. Today, we are billing for 243 megawatts, which equates to more than $350 million of annualized colocation GAAP revenue with significant additional capacity expected to begin billing over the next several months. As a reminder, under GAAP, revenue from the Core lease contract is recognized on a straight-line basis over the 12-year lease term, effectively pulling escalators forward. From a Bitcoin mining perspective, we remain focused on optimization and are running that business to help offset contractual power costs as we continue the transition toward high-density colocation. Going forward, we expect mining activity to continue winding down over the course of the year with a meaningful step down in miners online in the second half. Earlier this year, we monetized a significant portion of our Bitcoin holdings and currently retain only a modest amount of Bitcoin on the balance sheet. Moving on to costs. First quarter SG&A on a cash basis was just over $30 million. While we are not providing explicit SG&A guidance, we believe this level represents a reasonable baseline for corporate expenses going forward with the potential for opportunistic investments to support growth over the next few years. Separately, you may have noticed that we increased our target cash gross profit range for the CoreWeave contract to 80% to 85%, up from our original target of 75% to 80%. We first introduced that target roughly two years ago. And today, we have much greater visibility into the associated cost structure given we are now billing for a meaningful portion of the contracted megawatts. With that operating backdrop, let me turn to capital formation, where today marked another major milestone for Core Scientific. We closed our previously announced $3.3 billion CoreWeave project bond financing at a 7.75% interest rate, which we view as highly attractive cost of capital for a financing of this scale. After closing costs and funding the required debt service reserve account, net proceeds were approximately $2.9 billion. For additional context, the bonds include a lockbox structure, which is a cash control mechanism where project revenues are paid directly into a designated account and then applied through the indenture-defined cash waterfall, first to operating expenses, then the debt service and finally, to other uses permitted by the indenture. Unlike a traditional project finance structure, where a lockbox is created to fund a specific project under development. Our structure enables the distribution of the vast majority of offering proceeds up to the corporate level to facilitate investments in a variety of new projects outside the box. Going forward, the lockbox will service the debt secured by Coreweave's contracted site assets and cash flows. From this perspective, the transaction significantly strengthens our consolidated capital position, validates the quality and predictability of our contracted cash flows and gives us the ability to execute the next phase of our growth plan with greater flexibility, speed and certainty. We expect to deploy roughly $2 billion of total capital expenditures in 2026. This includes approximately $700 million for both the Hunt County, Texas site acquisition, which closed yesterday, and the Polaris acquisition at our Muskogee, Oklahoma site announced earlier today as well as expenditures to begin preceding approximately 1 gigawatt of new billable capacity. This includes long lead time equipment procurement and various site development and utility support activities across multiple project locations. We are strategically positioning the business to sign attractive new customer contracts with capacity outside of CoreWeave available for delivery starting in early 2027. The platform we are building together with cost-effective capital we have secured for new project equity investments is differentiated in the market, and we believe it positions Core Scientific to create meaningful long-term shareholder value. Lastly, we recently welcomed Jorge Ray as our Chief Accounting Officer, further strengthening our finance and accounting team. Jorge brings valuable accounting and public company reporting experience and his leadership will be important as we continue to scale the business and support our next phase of growth. I'll now turn the call over to the operator for questions.
Operator: [Operator Instructions] And our first question will come from Brett Knoblauch with Cantor Fitzgerald.
Brett Knoblauch: Congrats on the site expansion at Pecos and Muskogee. I guess maybe just on the hyperscaler exclusivity expired. Clearly, there's demand with additional tenants kind of backfilling that. But can you maybe shed light on why it expired, why it didn't progress? Is there anything that maybe those sites were not of interest or they weren't interested in? Or just some more color around that dynamic?
Adam Sullivan: Yes, absolutely. And thank you, Brett. Yes, I mean, those sites, as you mentioned, are incredibly attractive, both Pecos and Muskogee, given their ability to scale, represent tremendous opportunity for hyperscaler. As we noted in the prepared remarks, three hyperscalers immediately engaged. They're incredibly attractive sites. And really, with the one that we are under exclusivity with, it's hard to determine the exact reasons why. But for us, I mean, we got to the end of -- got to the end of the exclusivity. And we thought this is the best time for us to bring these back to market because hyperscalers were knocking at the door and asking questions about the sites. And we knew we could have an opportunity to bring another hyperscaler into the fray. So we feel great about our position today given the competitive dynamic.
Brett Knoblauch: Perfect. And maybe just one follow-up. It seems like kind of the AI pendulum swinging into full mode here, and you guys do have, I believe, a lot of capacity available to be kind of RFS by early '27. Do we think we're closer to maybe a second tenant today than we were when you guys reported 4Q in early March?
Adam Sullivan: Yes. I mean when you look across our site portfolio, we have five sites with first data halls RFS in 2027. It's an incredibly unique position given the different size and scale and geography spread that we have inside our portfolio. We're in conversations with all of the hyperscalers, chip makers, AI labs, Neo-clouds. Really, we're in a unique position here just given the asset spread that we have. And so I would say, definitely across the entire site portfolio, we are closer than we were before.
Operator: Our next question will come from John Todaro with Needham & Company.
John Todaro: Congrats on the expansion of Power. Two for me. I guess just one, going back to the other three hyperscalers you're now in conversation with. I guess just if we frame it up, was there already some dialogue at some point? I mean, obviously, it's a little bit of a limited universe. But should we be thinking of kind of starting the process anew with them? Or there's already been at some point along the way, pretty far along where just we could get something maybe a bit sooner than necessarily restarting the process?
Adam Sullivan: Yes. Thanks, John. Yes, I mean our relationship with these groups is not new. We are engaged with them on other sites. So this was just really bringing back both Pecos and Muskogee back to the table. And that's really why we are able to immediately reengage with those customers.
John Todaro: Got it. Understood. That's very helpful. And then just you mentioned starting some of the process on building out some of these assets. It sounds like before lease gets done at some of them. Is there any guardrail on how much CapEx you would start putting forward before getting a lease?
Adam Sullivan: Yes. I mean the way we're thinking about it right now is we want to take the first data hall to full RFS. And as part of that, that means we're securing the labor, securing the trades, we're securing long lead equipment. And we're putting ourselves in a position where if a customer signs really within any time period leading up to the RFS, the first data hall, we can just continue to extend all of that labor that we have secured on site. So that's kind of our guardrail right now in terms of where we sit. But we feel very confident in the strategy and the ability to show the progress that we're making across each of these sites to customers is really what's forcing the engagement here because everyone is incredibly interested in capacity that's getting delivered in '27 right now.
Operator: And we'll go next to Tim Horan with Oppenheimer.
Timothy Horan: So do you have a rough idea when you might sign a contract? And can you maybe just talk about the pricing trends at a high level?
Adam Sullivan: Yes. I mean I'll just say we're actively engaged right now across every major group, and we feel very confident based on where we sit today versus where we sat three months ago. The only thing that's changed is our assets have continued to build more value. We've continued to deploy more capital, and we've continued to get closer to the RFS state. So we have high confidence in the customer conversations that we're having today. And if you could just remind me, Tim, what was your second question?
Timothy Horan: Yes. So what are you seeing in the pricing trends? So with the pricing of the new contracts do you expect?
Adam Sullivan: Yes. I mean I think you could expect to see pricing continue to firm up. Really, that's the result of both labor and equipment continuing to inflate. And so what you're just seeing is a similar move in pricing.
Timothy Horan: And then just lastly, behind-the-meter power, can you give us just a sense of what's the lead time on that? And ultimately, how will your cost per build your own versus the grid compare?
Adam Sullivan: I mean, right now, what we're looking at really is to deploy behind-the-meter solutions anywhere from about 12 to 14 months. But the great part is for us is that these are opportunities given the locations that we have available to us is really going to represent a great opportunity for continuing to expand at those sites. The other site that we haven't talked about, Hunt, has the opportunity to potentially bring behind-the-meter, but that's something that we're still in the evaluation phase today, haven't necessarily done as much of the due diligence that we've done across Pecos and Muskogee, and the work that is currently being performed there.
Timothy Horan: And is the ultimate cost of the customer about the same as the grid or a little bit more?
Adam Sullivan: It's about the same. I mean, the economics for us as developer look very similar. So the cost to the end tenant on a blended basis per power rate is not materially different.
Operator: And Michael Donovan with Compass Point has our next question.
Michael Donovan: So another question behind-the-meter. The Muskogee announcement this morning referenced Oklahoma's behind-the-meter legislation. Can you explain what that legislation changes for Core Scientific's ability to develop and whether it gives Muskogee a timing or cost advantage versus opportunities in Texas?
Adam Sullivan: Yes. Governor Stitt has been a big advocate of bringing behind-the-meter opportunities to the state of Oklahoma. Obviously, you saw Governor Stitt's quote in the press release today. Oklahoma is focused on figuring out how to bring more generation to the state. And so our ability to execute in Oklahoma, I wouldn't say it's necessarily any easier or any more difficult than our site in Pecos, but we definitely have the support of the government there to continue to bring more generation to the state.
Michael Donovan: And one follow-up, if I may. Have you contemplated owning the generation assets? Or would you be solely partnering with a power developer? And then how are you thinking about redundancy?
Adam Sullivan: Yes, I'll take the first part of that question, and then I'll hand it over to Matt to take the question about redundancy. As we evaluate the behind-the-meter solutions, there are potentially some solutions that we would own ourselves, and there are others that we would work through a third party that would provide us a PPA, and we would be paying for those over a course of time, which would be included in the power price. So there are a few different methods that we could go down. It really just comes down to the economics question, as well as who the behind-the-meter solution is from. But Matt, do you want to talk about redundancy?
Matt Brown: Yes. To include in that is the maintenance and operation of the behind-the-meter generation, sort of come along -- comes with that PPA agreement as well. And from a redundancy standpoint, obviously, when we're building behind-the-meter, redundancy becomes much more critical in terms of when you're building high-availability services. So we'll think about redundancy in terms of we need to be able to support the full load -- of the portion of the campus that we're powering from behind-the-meter under maintenance conditions, meaning that we need to be able to take some of that equipment offline for maintenance, maintain full load, and have redundant capacity still online and available in the event of a failure. So you can almost think about that as a minimum N plus 1 configuration, maybe an N plus 2 or an N plus 20% or N plus 30% type of redundancy scheme.
Operator: And moving on to Joseph Vafi with Canaccord. Congrats on the progress.
Joseph Vafi: Just wondering how you're managing, perhaps the labor side of the builds here. I'm not quite sure if you're employing a few large GCs on the build? Or are you looking at construction labor as any constraint in the market right now?
Matt Brown: Great question. Labor is one of the primary constraints in the market, if not depending on which market we're talking about. But when we look nationally, labor is a big issue. It's one of the reasons why we think we have an advantage by being able to proactively invest in the development of these sites, being able to secure and tie up the labor through our projected RFS, and scaling beyond that. In terms of how we're doing that, we have a couple of large GCs executing the sites in development today. And those GCs have a lot of leverage in the marketplace. being able to secure electrical contractors, mechanical contractors, civil, et cetera. And all of those, all except for probably one site, are already fully mobilized and executing our development as we speak.
Operator: We'll go next to Paul Golding with Macquarie Capital.
Paul Golding: Congrats on the progress. Just wanted to ask about these behind-the-meter opportunities that you've been discussing. I know you just mentioned in response to another question that you might partner with someone who would give you a PPA, or you might look at an opportunity to do it yourself behind-the-meter in terms of generation. How is the air quality component of that structured? Or how do you see that potentially being structured? Do you still have to go to the market and apply for those emissions permits? Or would a partner that you're speaking with already have that in hand? And then I have a follow-up.
Matt Brown: Great question. As we -- I mentioned in our prepared remarks, the technologies that we're going to get behind and support for all of our behind-the-meter sites are going to be technologies that are low emissions generally. So that will give you a little bit of insight as to what we're not thinking about from that standpoint. And to go and to talk about the permitting standpoint, yes, we will have to certainly go and apply for air quality permits for many of these deployments. In some cases, that will be in participation with the behind-the-meter operator or supplier. And in other cases, we'll be doing that on our own. And I will say that in both Pecos and Muskogee, we're already down -- kind of far down the path of sort of our air quality studies for the implementation of those solutions.
Paul Golding: And I was just hoping you could also give a little more detail around some of the puts and takes that enabled you to raise the run rate margin profile on the existing energized and billable capacity from that 75 to 80 to 80% to 85%.
Adam Sullivan: Yes. So two years ago, when we signed the CoreWeave -- original CoreWeave contract, we had a scope of service contemplated in that deal. And I think we had an element of conservatism knowing that we hadn't broken ground on the project at that point, knowing that we were going to be deploying over a fairly lengthy period to have what I would call a very solid perspective on what we think we could have delivered. And once you're two years after the fact, you're into it and we've got more experience under our belt on the specificity of actual heads that are going to be devoted to the activities and the contractors that we're using and actually have deployed on site. It's really just a true-up of that experience. So, we feel good that we're at a margin level that we can deliver today, and we felt more confident that we could be a bit more prescriptive of where we think we're going to end up.
Operator: And our next question comes from George Sutton with Craig-Hallum.
George Sutton: As you begin to market to the chip makers and the Neo-clouds, I'm just curious, do you have a bifurcated sales portfolio where some of the sites and some of the maybe even parts of locations are being marketed to those folks versus the hyperscalers? How is that working through the system?
Adam Sullivan: Yes. I mean, really, we're showing both chip makers, Neo-clouds, labs. We're showing them the same sites that we are also showing to hyperscalers. I mean as we work through these processes, oftentimes, they're migrating to one or another site. But in reality, we're showing our entire portfolios to each of the customers that come through our door.
George Sutton: And one other question relative to the decision to execute ahead of the contracts. How does the negotiation get altered with some of these potential customers when you've secured the supply chain and you're kind of moving forward? Are they -- does that accelerate discussions? Does that keep them more engaged? Can you just walk through that thought process?
Adam Sullivan: Yes. I mean it definitely keeps them more engaged. I mean they rarely see sites that come across their desk where there's an RFS timeline really within 18 months, but even more so less than that. And so for us, being able to show photos and videos of sites with active construction going on and the list of equipment that are on order that dramatically changes the dynamic of the discussions because this isn't just a photo of a piece of land. This is an active construction site actively progressing towards building a data center.
Operator: We'll go next to John Hickman with Ladenburg Thalmann.
Jon Hickman: And this is a little bit esoteric. But now that you're well into your build-out for CoreWeave, could you comment on the experience? Like what was harder than you thought? What was easier? Where do you think you have a competitive advantage now that you've put that many megawatts into production?
Matt Brown: It's actually a great question. The kind of reflecting on that, I think the thing that was much more difficult than we certainly gave a credit for was the -- was actually executing on brownfield conversions, which is why everything you see that we're doing forward is actually a greenfield site with a very highly standard basis design that allows us to get kind of leverage over our supply chain and be super predictable in terms of our delivery dates. Brownfield sites are highly unpredictable. They require a lot of customization. It's a lot of effort to try to retrofit an existing building. While sometimes that could be faster, it also has -- it comes with a lot more complexity. So that's what I would say is probably our biggest lessons learned out of this.
Jon Hickman: Okay. And so competitively, now that you've learned that, so where do you think you are with other people that are trying to, I mean, there's many other competitors that are trying to build data centers…
Matt Brown: Yes. I think the great part of this is that we've had five sites to practice on, but we have been executing these high-density builds across all the CoreWeave locations. We have been able to iterate on those designs. I mean we've executed more than 150 design changes along the way across the portfolio. And that gives us a little bit of ahead of the game in terms of what doesn't work and what works well. And all of those learnings have been sort of culminated and formulated into go-forward build strategy. And so, I think we have just the advantage of learning all those lessons firsthand in real time. And so, we won't make those mistakes going forward.
Jon Hickman: Congratulations on the new deals.
Operator: And our next question comes from Nick Giles with B. Riley Securities.
Nick Giles: This is [Henry Hearle] on for Nick Giles. I wanted to ask about the change in your approach to exclusivity. So in what scenarios would you go into it? And then you also mentioned being in contact with several counterparties. So would you expect to announce exclusivity if you were to enter into one?
Adam Sullivan: Yes. Thanks, Henry. I wouldn't say that we would expect to announce in the interim between quarters. But really, what we've migrated to here is moving to a milestone arrangement method, which allows us to ensure that the cadence is moving at the pace that we would expect it to in a deal that would move towards closing. So that allows us to bring a site back on market if we don't feel like the pace and cadence is necessarily where we would like it to be. So we've migrated to this strategy. We're executing on it now, and we feel like it gives us the best shot on goal given the demand that we're seeing in the market today.
Nick Giles: And then on winding down your Bitcoin mining operations in the coming quarters, do you guys have a definitive target date to be fully out of that business? Or will it kind of act as a small hedge going forward?
Adam Sullivan: I would say over the course of the remainder of this year, the Bitcoin mining business is going to continue to migrate lower. And by the end of this year, we will only have one or potentially two sites operating Bitcoin mining.
Operator: Moving on to Stephen Glagola with KBW.
Stephen Glagola: Adam, I just wanted to touch base again on the challenges on securing the leasing commitments at Pecos and Muskogee. From my standpoint, it would seem like you have strong leverage there. The sites have near-term power. You can point to your execution in the CoreWeave buildout to date. So I guess like maybe my question is, are you seeing the hyperscalers become more selective in their choice of development partners? And if so, how is that influencing demand or deal timing?
Adam Sullivan: Yes. I mean I think the interesting part about this is the exclusivity that expired, that customer is still at the table and still interested in those sites. So, I think you are seeing that broadly across the market. You're seeing repeat deals across some of the developers, especially on the private side. So, I would agree with that. But also, they're also looking for experience in the development of this type of infrastructure. This is different than the traditional data center infrastructure. And given the experience that we have and our ability to show them five sites that we built, 590 megawatts in progress of critical IT load, that's a differentiator. And that really puts us in a different bucket here. So as you mentioned, we have great experience building. We have sites under construction, and it really puts us into a pretty unique category in this industry.
Operator: And this now concludes our question-and-answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.