CoreWeave Restarts Talks to Acquire Core Scientific Stock Surges 300%

CoreWeave, an AI cloud infrastructure provider backed by Nvidia and serving clients like Microsoft and OpenAI, has restarted negotiations to acquire Core Scientific, a Bitcoin miner. This move comes nearly a year after Core Scientific's board rejected CoreWeave's initial offer of $5.75 per share, totaling $1 billion, deeming it significantly undervaluing the company. The terms of the latest negotiations remain undisclosed, but the market responded swiftly, with Core Scientific's stock surging, pushing its valuation close to $4 billion.

The renewed interest from CoreWeave is driven by the need to secure infrastructure for the AI race. CoreWeave, which recently completed a $1.5 billion IPO, is competing with giants like Amazon Web Services and Google Cloud for computing power. Unlike these competitors, CoreWeave does not own extensive data center networks. Core Scientific, with its energy infrastructure and facilities near abundant power sources, offers a strategic advantage. The existing 200-megawatt deal between the two companies is just the beginning. Owning Core Scientific outright would give CoreWeave direct control over power contracts, bypassing the data center capacity bottleneck that is hindering AI expansion.

For Core Scientific, the timing of this potential acquisition is strategic. The company emerged from bankruptcy in early 2024 with a leaner operation and a stronger balance sheet. However, Bitcoin's halving in April reduced mining rewards, squeezing margins across the industry. While some miners are selling off assets or pivoting to AI hosting, Core Scientific's management has held out for a bigger play. Their first-quarter profit of $580 million, driven by Bitcoin's price rebound and efficient operations, demonstrated their transformation from a distressed asset to a strategic one.

The return of CoreWeave to the negotiating table highlights a broader realignment in digital infrastructure. The boundary between Bitcoin mining and AI compute is thinning, not because the technologies are converging, but because they share the same scarce foundation: power. In this context, Core Scientific's real value may not be its mining rigs, but the grid connections beneath them. The potential merger would create a formidable entity in both cryptocurrency mining and AI infrastructure, capitalizing on Core Scientific's extensive mining fleet and CoreWeave's growing AI capabilities.

The strategic partnership between Core Scientific and CoreWeave has been established through their June 2024 agreement, where Core Scientific committed to providing hundreds of megawatts in hosting capacity. This potential merger would leverage Core Scientific's position as one of North America's largest digital infrastructure operators for bitcoin mining and high-performance computing, making it an attractive acquisition target. The broader market context, with strong momentum in the cryptocurrency sector and increasing institutional adoption, provides a favorable backdrop for the potential merger. The consolidation between these two companies would represent a significant development in the convergence of the cryptocurrency mining and AI infrastructure sectors, potentially creating a more resilient and diversified entity capable of capitalizing on both markets.