Bitcoin miner CleanSpark has proposed raising $1 billion through a convertible bond offering to fund a share buyback and support its AI expansion efforts.

CleanSpark wants to issue $1.15 billion in zero-coupon convertible notes and use the capital to strengthen its balance sheet and accelerate growth, according to a Nov. 10 announcement.

According to the Las Vegas-based firm, the notes are due in February 2032 and will not bear regular interest. Purchasers will be able to convert them into shares of the common stock, or a combination of cash and shares, at CleanSpark’s discretion.

Initial purchasers will also have the option to buy an additional $200 million in convertible notes within a 13-day window from the date of issuance, subject to market conditions and other factors.

The company intends to use $400 million from the proceeds to execute a share buyback, and the remaining funds will be channeled towards power and land expansion, data center development, and to repay its bitcoin-backed credit lines.

CleanSpark expands into AI

CleanSpark forayed into the AI sector last month with the launch of its new division led by industry veteran Jeffrey Thomas, and acquired a 271-acre site in Texas that would house a 285 megawatt power load to develop a dedicated AI data center campus. Around the same time, the company partnered with Submer to explore liquid-cooled and prefabricated infrastructure solutions for high-performance computing.

To fund its AI ambitions, CleanSpark is using proceeds generated from its Bitcoin mining operations, which recently hit a record hashrate of 50 exahashes per second. Last month, the company’s total Bitcoin holdings hit an all-time high of 13,011.

Subsequently, it sold 589 BTC in October and used the capital to acquire the land and secure power agreements for its Texas data center.

CleanSpark has also expanded a $200 million bitcoin-backed credit facility it had secured earlier this year through Coinbase Prime, later adding another $200 million in capacity through agreements with Coinbase and Two Prime.

Recent efforts followed a strong third-quarter performance, which the company has labelled as the “most successful quarter in CleanSpark’s history,” with its quarterly revenue rising 91% year over year to $198.6 million.

Despite its AI expansion and a strong fiscal showing, the company’s shares have struggled over the past month due to Bitcoin’s volatility during the period. 

CleanSpark closed the day at $15.03 on Nov. 10, down 3.47% from the previous close, with after-hours trading extending the slide to $14.36. The stock has fallen 25% over the past month, retreating from highs above $22 seen in mid-October. 

The share buyback, however, may help mitigate further losses.