Core Scientific Faces Shareholder Backlash Over $9 Billion Merger with CoreWeave

Core Scientific is facing a shareholder revolt over its planned $9 billion merger with CoreWeave. Investment firm Two Seas Capital has criticized the deal, stating it undervalues the company and puts investors at risk. The firm has urged shareholders to vote against the merger and the associated executive compensation package. The vote will determine the future of Core Scientific, which may either continue as an independent company or merge with CoreWeave to pursue AI-driven opportunities.

Core Scientific, a prominent player in the AI infrastructure space, is facing a significant challenge as its planned $9 billion merger with CoreWeave encounters strong opposition from investors. The investment firm Two Seas Capital has led the charge, criticizing the deal for undervaluing Core Scientific and putting investors at risk. The firm has urged shareholders to vote against the merger and the associated executive compensation package.

Two Seas Capital, which holds a 6.3% stake in Core Scientific, filed a preliminary proxy statement on September 3, 2025, urging shareholders to vote against the proposed all-stock merger. The firm argues that the deal was the product of a flawed process that undervalues the company and exposes investors to economic risks [3]. The merger agreement, announced on July 7, 2025, would see Core Scientific shareholders receive 0.1235 shares of CoreWeave Class A common stock per share in an all-stock transaction valued at approximately $9 billion [3].

The upcoming shareholder vote, scheduled to take place virtually through a live webcast, will address two key proposals: the approval of the merger agreement itself and a non-binding vote on executive compensation linked to the merger. Two Seas Capital has recommended voting "AGAINST" both proposals, citing concerns about the excessive nature of the compensation package and the potential dilution of Core Scientific’s value [3].

The merger aims to create an AI infrastructure dominance by combining Core Scientific’s 1.3 GW power capacity with CoreWeave’s AI offerings. However, the all-stock structure of the deal has drawn criticism from investors, who fear that Core Scientific shareholders will be left exposed to CoreWeave’s volatile stock price without downside protections [2]. The lack of a price collar or cash component in the deal means that Core Scientific shareholders could end up owning less than 10% of the combined company, a stake that could shrink further if CoreWeave’s stock continues its recent 30% decline [2].

Regulatory approvals from the Federal Trade Commission (FTC) and the Department of Justice (DOJ) are also a significant uncertainty. The merger requires antitrust scrutiny, and the HSR notification deadline is set to expire on August 25, 2025 [2]. While the companies remain optimistic about a Q4 2025 close, the deal’s success is not guaranteed.

The outcome of the shareholder vote will significantly shape Core Scientific’s future. If the merger is approved, the company could gain significant cost advantages and accelerate its AI offerings. However, if the deal is blocked, CoreWeave may need to renegotiate terms or consider alternative strategies to secure its AI infrastructure goals.

In conclusion, the CoreWeave-Core Scientific merger is a high-stakes gamble that could have profound implications for both companies and the broader AI infrastructure market. The upcoming shareholder vote will be a critical test of investor sentiment and the deal’s viability.

References:
[1] https://www.cryptotimes.io/2025/09/04/core-scientific-faces-shareholder-revolt-over-9-billion-coreweave-merger/
[2] https://www.ainvest.com/news/strategic-merger-coreweave-core-scientific-high-stakes-play-ai-infrastructure-boom-2509/
[3] https://blockspace.media/insight/two-seas-capital-urges-core-scientific-shareholders-to-block-9-billion-coreweave-deal/