Written by: Protos

Translated by: Chopper, Foresight News

Since 2024, Core Scientific has paid at least $67.9 million to Block, a company owned by Jack Dorsey, for the purchase of Bitcoin mining chips. Subsequently, the company incurred a loss of $41.9 million due to the cancellation of remaining mining machine purchase contracts.

The data center operator made payments of $10 million to Block in July 2024, $21.3 million in January 2025, and completed the final payment of $36.6 million in January 2026.

However, the company announced today in its latest quarterly report that Core Scientific "has signed a termination and settlement agreement with Block and its subsidiary Proto Global LLC to terminate existing contracts and all subsequent mining machine delivery obligations, resulting in a loss of $41.9 million."

Despite having to bear this huge loss, Core Scientific has still decided to terminate its procurement obligations with Block's mining hardware division, Proto, to advance its "strategic transformation."

Block announced a procurement framework agreement as early as July 2024, planning to deliver self-developed 3-nanometer mining chips with a computing power of approximately 15 EH/s. Core Scientific was the first customer of Proto chips and the only large purchaser on Block's public list.

Block stock price trend

Jack Dorsey's Bitcoin mining business

As of January 2025, Core Scientific had already paid $31.3 million in deposits and advance payments, and at that time estimated that it would still need to pay $64.8 million for subsequent goods. In January 2026, after some mining machines were delivered, the company paid another $36.6 million. Shortly after, Core Scientific recorded a loss of $41.9 million and canceled all remaining orders.

This announcement from Core Scientific did not break down the specific composition of this expense in detail, but the result is very clear: the company is willing to bear the huge loss to stop procuring the Bitcoin mining machines launched by Dorsey.

One day before the announcement, Core Scientific signed a 15-year leasing agreement for a total scale of 529 megawatts, with the vast majority of the data center directly leased to AMD. The company stated that this leasing agreement, unrelated to Block, is expected to bring in over $14 billion in contract revenue.

Now, renting server rooms to AMD is far more profitable than using Dorsey's mining machines to mine Bitcoin.

Protos previously reported that Block had shut down its internal incubation of Bitcoin mining projects and the Web5 identity project in the TBD department in November 2024.

In the quarterly shareholder letter, it was stated: "We will reduce our investment in the music streaming platform Tidal and shut down the TBD department. This allows us to have more funds to invest in the Bitcoin mining business. This business has a good product-market fit, sufficient order demand, and continues to develop the Bitcoin self-custody wallet Bitkey."

The so-called "sufficient order demand" ultimately led to a major customer willingly incurring a $41.9 million loss to escape the procurement contract.

Dorsey stated during the Q2 2025 earnings call regarding the mining business: "We will gain a large number of satisfied customers, expand our market size, and capture a significant market share."

One week after this conference call, Block officially launched the Proto mining machine at Core Scientific's facility in Dalton, Georgia. Less than a year later, this core major customer directly incurred a loss from the contract termination, canceling all remaining orders.

Jack Dorsey faces consecutive business setbacks

The cooling of Block's mining machine business is just one part of a series of failed projects for Jack Dorsey. Over the past five years, Block's stock price has dropped by a cumulative 68%.

In 2021, Block spent $237.3 million (adjusted) to acquire Jay-Z's music platform Tidal. Reuters reported that this acquisition was widely viewed as "a major mistake" at the time. Subsequently, Block recorded an impairment of $132.3 million for Tidal, effectively admitting a huge loss on this acquisition.

In July 2025, Dorsey launched the open-source messaging software Bitchat. Just a few days after its launch, he added a risk warning in the code repository: this software has not undergone external security audits and may have vulnerabilities, which might not achieve the advertised security goals.

In January 2025, the Consumer Financial Protection Bureau (CFPB) ruled that Block must pay a $55 million fine, along with an additional maximum payment of $120 million to address improper handling of Cash App fraud complaints. Just a day before the penalty was issued, state financial regulators had recently imposed an $80 million fine on Block.

In February 2026, Block disclosed plans for significant layoffs to shareholders, reducing its workforce from more than 10,000 employees to under 6,000, with over 4,000 employees facing termination or negotiation for layoffs.

Block will release its Q2 2026 earnings report after the U.S. stock market closes on August 5, and has not yet responded to the termination of the contract with Core Scientific.