AMD Gets a 30M-Share Warrant in Core Scientific Deal

Only 377 of the 529 megawatts are leased to AMD

Core Scientific signed two sets of leases on Monday. The AMD leases cover 377 megawatts of critical IT load at three sites: Pecos, Texas, Muskogee, Oklahoma and Hunt County, Texas. A second set covers 152 megawatts at Auburn, Alabama and Dalton Phase 3, Georgia, and the tenant there is not AMD. The 8-K calls it a Neocloud and does not name it.

Critical IT load is the power that actually reaches the servers, a smaller figure than the gross power a campus draws from the grid, and it is the unit these agreements are now written in. It is also the constraint doing the rationing across the industry, which is the mechanism behind the data center buildout we mapped earlier this year.

AMD is not absent from the neocloud side. It signed a Credit Support Agreement covering each of those leases, which protects AMD equipment held on the premises, gives AMD the right but not the obligation to cure certain tenant defaults, and sets out its standing if the tenant defaults materially. Every lease in the batch runs fifteen years with three five-year options, so the outer term is thirty years.

The warrant is a meter that runs on megawatts

The warrant is exercisable immediately, subject to its vesting conditions, and terminates on July 27, 2031. It vests at 12,222 shares for each megawatt of critical IT load contemplated by the leases. Multiply that rate by the 529 megawatts executed on Monday and 6,465,438 shares became exercisable, which the filing rounds to approximately 6.5 million. Divide the full 30 million shares by the same rate and the answer is 2,454.6 megawatts. Add the 529 signed to the 1,925 AMD has reserved and the answer is 2,454. The warrant is sized to the last megawatt on the table and no further.

The $23.47 strike is the volume-weighted average price of Core Scientific stock over the five trading days before the leases were executed, so the warrant was struck at the market rather than at a discount. Paying a chip customer in equity tied to capacity is a different shape of deal from the turbine and gas-equipment orders that have carried the same demand so far, including the jump in Baker Hughes gas equipment orders reported yesterday.

About a fifth of the warrant is live today

The 6,465,438 shares that vested on Monday are 21.6% of the warrant and 2.0% of the 321,340,441 shares on the cover of the company’s most recent quarterly report, dated July 23. Exercising that slice would cost AMD $151.7 million. The remaining 23,534,562 shares stay contingent until AMD converts its reservation, which is 3.6 times everything signed so far and expires 885 days after Monday.

That structure puts the dilution on a schedule the buyer controls. It is the same trade the rest of the buildout has been making in cash rather than shares, from Meta raising its capital spending guidance to the order surge at GE Vernova. Core Scientific paid in stock instead, and priced it at Monday’s average.

What to watch

1. The reservation clock runs to December 28, 2028. Every megawatt AMD converts before then moves another 12,222 shares from contingent to exercisable, so the vesting schedule doubles as a public counter on how much of the 1,925 megawatts AMD actually takes.

2. The neocloud has no name in this filing. It holds 152 megawatts, 28.7% of everything signed on Monday, and AMD is backstopping its leases rather than signing them. A name would most likely surface in a later lease amendment or in the notes to a quarterly report.

3. Core Scientific filed its second-quarter results as a separate 8-K six minutes after this one, and a Form 10-Q the same morning. The 10-Q is the document that carries the lease accounting, the contracted revenue behind the fifteen-year terms, and the share count the 9.3% figure is measured against.