CoreWeave’s $9 Billion Acquisition of Core Scientific: A Major Move in AI and HPC
CoreWeave has successfully finalized its acquisition of Core Scientific for a staggering $9 billion in an all-stock deal. This strategic move is set to strengthen its foothold in the AI and high-performance computing (HPC) markets.
Transforming the AI Landscape
The announcement of this acquisition marks one of the year’s most significant developments within AI infrastructure. CoreWeave, known for its rapid growth as a cloud provider focusing on AI workloads, has been pursuing Core Scientific since early 2024. After facing earlier rejection of a lower valuation bid, this latest agreement not only emphasizes CoreWeave’s ambitions but also its readiness to substantially enhance its operational capacity and reduce long-term costs.
Under the terms of this deal, shareholders of Core Scientific will receive 0.1235 shares of newly issued CoreWeave Class A common stock in exchange for each CORZ share they own. This agreement values each Core Scientific share at approximately $20.40, a notable 66% premium compared to its closing price of $12.30 on June 25. The merger is anticipated to be finalized in the fourth quarter of 2025, subject to regulatory and shareholder approvals.
Expanding Power Capacity
A key advantage of this acquisition is the substantial infrastructure CoreWeave will gain. The deal brings with it around 1.3 gigawatts of gross power from Core Scientific’s network of data centers across the United States. Moreover, CoreWeave has identified an additional 1 gigawatt of potential expansion capacity. This newfound power is critical, especially as demand for AI computing resources continues to grow exponentially.
CoreWeave’s strategy involves repurposing much of the existing infrastructure to cater to AI and HPC workloads. Additionally, there may be opportunities to divest some of Core Scientific’s crypto-mining assets in the near term, further solidifying its focus on AI.
Financial Savings and Operational Efficiency
CoreWeave anticipates unlocking over $500 million in annual run-rate cost savings by the end of 2027 as a result of this merger. This financial advantage is primarily due to the elimination of over $10 billion in anticipated future lease obligations over the next dozen years.
By owning its own data center assets outright, CoreWeave can streamline operations and mitigate lease-related risks. This vertical integration not only sharpens the company’s competitive edge but also enhances its ability to support large-scale deployments of advanced AI hardware, including systems like Nvidia’s GB300 NVL72.
Market Response to the Acquisition
The immediate response from the market to this acquisition was somewhat mixed. Following the announcement, shares of Core Scientific experienced a decline of over 15%. This drop suggests that some investors believe the premium offered does not fully reflect the company’s recent performance and growth potential.
In the first quarter of 2025, Core Scientific saw its earnings more than double, reaching $580 million. However, this growth was slightly tempered by factors such as the recent Bitcoin halving. At the time of the acquisition announcement, Core Scientific was reported to be the 33rd largest corporate holder of Bitcoin, with 977 BTC on its balance sheet.
However, CoreWeave’s leadership has made it clear that the focus of this acquisition is not a return to crypto-mining. Instead, the emphasis is on strategically reallocating resources and infrastructure to fulfill the increasing demands of AI and high-performance computing.
In summary, this acquisition by CoreWeave signifies a substantial shift in the competitive landscape of AI and HPC, positioning the company to leverage significant power capacity and infrastructure to meet future demands in these rapidly growing sectors.
