Core Scientific said in its latest quarterly report that it has entered into a termination and settlement agreement with Block, Inc. and Proto Global LLC, ending its existing contract and all future delivery obligations for mining equipment. The company said the move resulted in a $41.9 million loss.
That charge effectively marks the cost of getting out of a purchase arrangement for bitcoin mining hardware tied to Jack Dorsey’s Block. Core said it chose to wind down its mining obligations to Proto, Block’s mining hardware division, as part of a “strategic transition.”
Core had already paid Block at least $67.9 million
According to Protos, Core Scientific had paid Block at least $67.9 million for BTC mining chips starting in 2024.
- $10 million in July 2024
- $21.3 million in January 2025
- $36.6 million in January 2026
Those payments add up to $67.9 million.
Block announced the purchase agreement in July 2024. It covered roughly 15 exahashes of Block’s own three-nanometer chips. Core Scientific was Proto’s first chip customer and remains the only large buyer that Block has publicly named.
Another $64.8 million had still been expected
By January 2025, after paying $31.3 million in deposits and prepayments, Core Scientific still estimated that another $64.8 million would be due under the arrangement.
In January 2026, it paid another $36.6 million upon delivery of certain rigs. It then recorded a $41.9 million loss to make the rest of the order disappear.
Core’s filing did not break down the exact makeup of that charge in detail. The result, however, was clear: the company accepted a large loss in order to stop buying Dorsey’s BTC miners.
Lease deal with AMD came a day earlier
A day before disclosing the termination, Core Scientific signed 15-year leases covering 529 megawatts, with most of that capacity going directly to AMD.
The company said those leases are unrelated to Block and could produce more than $14 billion in contracted revenue. Protos framed the shift bluntly: renting warehouses to AMD now pays better than mining BTC with Dorsey’s chips.
Block had pitched strong demand for the mining business
In November 2024, Block wound down TBD, the unit that had incubated its BTC mining initiative and its so-called Web5 identity project.
As Protos noted, Block wrote in its shareholder letter for that quarter: “We are scaling back our investment in TIDAL and winding down TBD. This gives us room to invest in our BTC mining initiative, which has strong product market fit and a healthy pipeline of demand, and Bitkey, our self-custody wallet for BTC.”
Block said at the time that cutting back TIDAL and shutting down TBD would free up room to invest in the mining initiative and Bitkey. It described the mining business as having strong product-market fit and a healthy demand pipeline.
Now, one of the customers in that pipeline has chosen to absorb a $41.9 million loss rather than keep its purchase commitments.
Dorsey had talked up the division on an earnings call
On Block’s Q2 2025 earnings call, Jack Dorsey said of the mining division: “So we’re gonna have some really happy customers and we’re going to grow the market and take a lot of market share.”
The week after that call, Block unveiled its Proto Rig miner on stage at Core Scientific’s own facility in Dalton, Georgia. Less than a year later, that showcase customer took a loss to cancel the rest of its order.
Protos tied the episode to a broader run of setbacks at Block
Protos said the disappointing mining-rig outcome continues a series of business failures at Block. Over the past five years, the company’s common stock has lost 68% of its value.
In 2021, Block paid $237.3 million after adjustments for most of Jay-Z’s music service, Tidal. Reuters reported at the time that the deal was widely seen as “a terrible business decision.” Block later wrote off $132.3 million of that Tidal investment as goodwill.
In July 2025, Dorsey released an open-source messaging app called Bitchat. Within days, he added a warning to the code repository stating that the software “has not received external security review and may contain vulnerabilities and does not necessarily meet its stated security goals.”
In January 2025, the US Consumer Financial Protection Bureau ordered Block to pay a $55 million penalty, plus as much as $120 million in redress, over Cash App’s handling of fraud claims. State financial regulators had fined the company $80 million the day before.
Then, in February 2026, Block told shareholders it was “reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation.”
Block has not commented on Core’s termination
Block is scheduled to report Q2 2026 results after the close of trading on August 5. As of Protos’ report, the company had not commented on Core Scientific’s contract termination.