Core Scientific will quit Bitcoin mining in Q4 2026 as self-mining loses money and AI colocation prints 60% gross margins on 92% of revenue.
Core Scientific will complete its exit from Bitcoin mining in the fourth quarter, the company said on its 5 November 2026 earnings call. It enters 2027 as a pure-play colocation provider for AI and high-performance computing workloads. The Q3 numbers in the company’s third-quarter 2026 results show why: the segment it is keeping now earns what the segment it is leaving loses.
Mining lost money while colocation printed margins
Self-mining revenue fell to $12.3 million in the quarter, down about 79% from $57.4 million a year earlier, and the company’s earnings exhibit shows the segment posting a $7.5 million gross loss. Colocation did the opposite: gross profit of $128.4 million on a 60% margin, with adjusted EBITDA margin at 57%, up from 25% the prior quarter.
Across the whole company, Bitcoin mining in both forms generated $17.5 million in the quarter, or 7.5% of $232.9 million in total revenue, against $215.4 million from colocation, which climbed nearly 60% sequentially. Chief Financial Officer Jim Nygaard told investors: “We expect to complete the wind-down during the fourth quarter and enter 2027 as a pure-play, high-density colocation provider.” He added that a 2027 profit and loss statement without mining should give investors a clearer view of the true colocation run-rate. Chief Executive Adam Sullivan set the same deadline plainly: “We expect to complete our exit from Bitcoin mining by year end.”
The retreat was already under way
The year’s filings trace how the decision was made. Core Scientific booked $266.5 million in mining-related asset impairments in the first quarter, citing weaker Bitcoin prices and historically low hashprice. In the second quarter it terminated its mining chip supply agreement with Block and Proto, at a cost of $41.9 million. Nygaard said the company had nearly 50% fewer miners online at the end of September than at the end of 2025, as power and floor space shifted to long-term colocation agreements.
The balance sheet shows the same direction. Digital assets stood at $2.7 million on 30 September, down from $49.7 million three months earlier and $222 million at the end of 2025. Liquidity ended the quarter at about $1.7 billion, including roughly $800 million in cash, after heavy spending on the AMD sites and the Polaris acquisition.
What the mining money is being replaced with
Core Scientific is billing for 485 megawatts of colocation capacity, up 90 megawatts in the quarter, supporting more than $700 million in annualized colocation revenue. It holds a long-term contract with CoreWeave covering about 590 megawatts, with the remaining roughly 100 megawatts in commissioning, and a 530-megawatt agreement backed by AMD across five campuses. Management expects that portfolio to generate $1.8 billion in average annual run-rate revenue and $1.6 billion in net operating income once fully delivered, a projection, not a result. The company expects the wind-down to complete before 31 December 2026, with the AMD contract’s initial deliveries targeted for the first half of 2027 and full delivery by the end of 2028.
