Original author: Protos
Chopper, Foresight News
Since 2024, Core Scientific has paid at least $67.9 million to Block, the company founded by Jack Dorsey, to purchase Bitcoin mining chips. Subsequently, the company incurred a $41.9 million loss due to the termination of its remaining mining equipment purchase contracts.
This data center operator paid Block $10 million in July 2024, $21.3 million in January 2025, and completed the final payment of $36.6 million in January 2026.
However, the company's latest quarterly report released today shows that Core Scientific "has entered into a termination and settlement agreement with Block and its subsidiary Proto Global LLC, terminating the existing contract and all future miner delivery obligations, resulting in a $41.9 million loss."
Despite the need to absorb this significant loss, Core Scientific has decided to terminate its procurement obligations with Proto, Block’s mining hardware division, to advance its strategic transformation.
Block announced a procurement framework agreement as early as July 2024, planning to deliver approximately 15 EH/s of computing power from its proprietary 3-nanometer mining chips. Core Scientific is the first customer for the Proto chip and the only large-scale buyer listed publicly by Block.
Block stock price movement
Jack Dorsey's Bitcoin mining business
As of January 2025, Core Scientific had paid $31.3 million in deposits and advance payments, with an estimated remaining balance of $64.8 million due. In January 2026, after partial delivery of the mining equipment, the company made an additional payment of $36.6 million. Shortly thereafter, Core Scientific recorded a $41.9 million loss and canceled the remainder of its order.
Core Scientific's announcement did not break down the specific components of this cost, but the outcome is clear: the company is willing to incur massive losses to stop purchasing Bitcoin miners introduced by Dorsey.
The day before the announcement, Core Scientific signed a 15-year data center lease agreement totaling 529 megawatts, with the vast majority of the capacity leased directly to AMD. The company stated that this lease agreement, unrelated to Block, is expected to generate over $14 billion in contract revenue.
Today, renting out data centers to AMD is far more profitable than mining Bitcoin using Dorsey’s miners.
Previously reported, Block shut down its TBD department, which internally incubated Bitcoin mining and Web5 identity projects, in November 2024.
In this quarter’s shareholder letter, it was stated: “We will reduce our investment in the music streaming platform Tidal and shut down the TBD division. This frees up additional capital to invest in our bitcoin mining business, which has strong product-market fit, robust order demand, and continues to grow our bitcoin self-custody wallet, Bitkey.”
所谓的“sufficient order demand” ultimately led to a major client willing to incur a $41.9 million loss just to escape the purchase contract.
During the Q2 2025 earnings call, Dorsey commented on the mining business: "We will attract a large number of satisfied customers, expand our market size, and capture significant market share."
One week after the conference call, Block officially launched the Proto miner at Core Scientific’s campus in Dalton, Georgia. Less than a year later, this key client directly terminated its contract at a loss and canceled all remaining orders.
Jack Dorsey has faced a series of business setbacks.
The decline in Block's mining hardware business is just one part of a series of failed initiatives by Jack Dorsey. Over the past five years, Block's stock has fallen a cumulative 68%.
In 2021, Block spent $237.3 million (adjusted) to acquire Tidal, Jay-Z’s music platform. Reuters reported that the acquisition was widely viewed by the market at the time as a “major misstep.” Subsequently, Block recorded a $132.3 million goodwill impairment on its Tidal investment, effectively acknowledging a significant loss on the acquisition.
In July 2025, Dorsey launched the open-source messaging software Bitchat. Within days of its release, he added a risk notice to the code repository: the software has not yet undergone external security audits and may contain vulnerabilities, potentially failing to achieve the advertised security goals.
In January 2025, the U.S. Consumer Financial Protection Bureau (CFPB) ordered Block to pay a $55 million fine and up to an additional $120 million in restitution to address mishandled fraud complaints related to Cash App. The very day before this penalty was imposed, state financial regulators had just issued Block an $80 million fine.
In February 2026, Block disclosed to shareholders its plan to significantly reduce its workforce, cutting the number of employees from over 10,000 to fewer than 6,000, with more than 4,000 employees facing termination or negotiated layoffs.
Block will release its second-quarter 2026 earnings after the close of U.S. markets on August 5 and has not yet responded to the termination of its agreement with Core Scientific.