CoreWeave and Core Scientific Merge in $9 Billion All-Stock Transaction.

CoreWeave and Core Scientific have agreed to a merger in an all-stock transaction valued at approximately $9 billion. The deal brings together two companies in the field of data infrastructure and is expected to create a leading player in the market. The merger is subject to regulatory approval and is expected to close in the fourth quarter of 2022.

CoreWeave (CRWV) and Core Scientific (CORZ) have announced a definitive agreement for CoreWeave to acquire Core Scientific in an all-stock transaction valued at approximately $9 billion at the time of the announcement. The deal is expected to close in Q4-25, subject to regulatory and shareholder approval. Core Scientific shareholders will receive 0.1235 newly issued shares of CoreWeave stock per CORZ share [1].

CoreWeave Overview

CoreWeave, an AI "hyperscaler", began as a cryptocurrency miner and now focuses on providing computing for AI workloads, leveraging Nvidia (NVDA) chips. Its recent IPO in Mar-25 was driven by a desire to hoover up even more chips to service other AI growth giants in need of excess capacity. They were involved with an old event-driven position of mine that has since gone bust, Sysorex (OTC:SYSX) [1].

Core Scientific Overview

Core Scientific, also with roots in crypto mining, has refocused on data center infrastructure. The company operates about 1.3 GW of gross power across its national footprint, with more than 1 GW of potential expansion available. The company's shift toward supporting AI and high-density workloads is a core part of the merger rationale. After going bust through the last Bitcoin cycle, they have emerged as a leaner and meaner host site for many of the CoreWeave data centers. Their long-term contract made them natural merger partners [1].

Strategic Rationale for the Merger

The acquisition allows CoreWeave to vertically integrate by owning instead of leasing the infrastructure it uses for its AI cloud services, which should greatly improve profitability. The investor deck notes this could result in "$10B+" of future lease expense savings [1].

Market Reaction

The deal values Core Scientific at a significant premium to its pre-announcement price. However, shares of Core Scientific fell sharply following the merger announcement, partly due to investor skepticism and the terms of the all-stock deal. The market does not believe the current, low float CRWV share price, and hedging the transaction price is difficult due to CRWV's extremely high short interest prior to the deal announcement (100% borrow cost) [1].

Conclusion

The merger between CoreWeave and Core Scientific is a significant event in the AI data center infrastructure market. It brings together two companies with complementary strengths and a shared focus on AI and high-density workloads. While the deal faces regulatory and market uncertainties, it presents an opportunity for investors to participate in the rapidly growing AI infrastructure sector.

References

[1] https://seekingalpha.com/article/4808288-core-scientific-coreweave-stock-merger-looking-for-trade

[2] https://finance.yahoo.com/news/global-ai-data-center-infrastructure-223200092.html

[3] https://www.benzinga.com/markets/tech/25/08/46819554/meta-plans-data-center-asset-sale-worth-nearly-2-billion-to-fund-next-phase-of-ai-development