Losing $41.9 Million and Still Terminating the Contract? Block's Major Mining Client Chooses to Exit

Renting data centers to AMD is far more profitable than mining Bitcoin using Dorsey's machines.

Written by: Protos

Compiled by: Chopper, Foresight News

Since 2024, Core Scientific has paid at least $67.9 million to Block, a company owned by Jack Dorsey, for Bitcoin mining chips. Subsequently, the company incurred a loss of $41.9 million due to the termination of remaining mining equipment 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 in its latest quarterly report that: "Core Scientific has signed a termination and settlement agreement with Block and its subsidiary Proto Global LLC, terminating the existing contracts and all subsequent mining equipment delivery obligations, resulting in a loss of $41.9 million."

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

Block announced a procurement framework agreement back in 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 buyer on Block's public list.

Block's 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, with an estimated $64.8 million still owed for future payments. In January 2026, after some mining machines were delivered, the company made another payment of $36.6 million. Shortly thereafter, Core Scientific recognized a loss of $41.9 million and canceled all remaining orders.

Core Scientific's announcement did not provide a detailed breakdown of this expense, but the outcome is clear: the company is willing to incur significant losses to stop purchasing the Bitcoin mining machines launched by Dorsey.

The day before the announcement, Core Scientific signed a 15-year lease agreement for a total capacity of 529 megawatts, with the vast majority of the data centers rented directly to AMD. The company stated that this lease agreement, unrelated to Block, is expected to generate over $14 billion in contract revenue.

Now, renting data centers to AMD is far more profitable than mining Bitcoin using Dorsey's machines.

Protos previously reported that Block had shut down its internal incubation projects for Bitcoin mining and the TBD department for Web5 identity 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 gives us more funds to invest in the Bitcoin mining business, which has a good product-market fit, strong order demand, and continues to develop the Bitcoin self-custody wallet Bitkey."

The so-called "strong order demand" ultimately led to a major client willing to incur a loss of $41.9 million to escape the procurement contract.

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

A week after this earnings call, Block officially launched the Proto mining machine at Core Scientific's facility in Dalton, Georgia. Less than a year later, this key client directly incurred losses and terminated all remaining orders.

Jack Dorsey Faces Continuous Business Setbacks

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

In 2021, Block spent $237.3 million (adjusted) to acquire Tidal, a music platform owned by Jay-Z. Reuters reported that this acquisition was widely viewed as a "major mistake" at the time. Subsequently, Block recognized a goodwill impairment of $132.3 million for this investment in Tidal, effectively admitting to a significant loss on the acquisition.

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

In January 2025, the U.S. Consumer Financial Protection Bureau (CFPB) ruled that Block must pay a fine of $55 million and an additional maximum of $120 million to resolve issues related to improper handling of Cash App fraud complaints. Just a day before the penalty was issued, state financial regulators had issued an $80 million fine to Block.

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

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