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CoreWeave has struck a $9bn deal to acquire its rival Core Scientific, in a transaction set to eliminate $10bn of expensive lease costs for the artificial intelligence data centre operator.
CoreWeave announced on Monday that it was acquiring Core Scientific in an all-stock transaction, capitalising on a rally in its share price to seal a deal that will hand the latter company a stake of less than 10 per cent in the overall business.
The New Jersey-based group said the deal valued its competitor’s shares at about $9bn, significantly higher than a previous takeover attempt last year that Core Scientific then rebuffed as “significantly” undervaluing its shares.
After that aborted takeover, CoreWeave struck billions of dollars of long-dated lease transactions with its Delaware-based rival, under which it rented out Core Scientific’s high-performance data centres in order to power the AI computing needs of its customers.
“Owning Core Scientific’s high-performance data centre infrastructure enables us to significantly enhance operational efficiencies and de-risk our future expansion,” CoreWeave’s chief executive Michael Intrator told analysts and investors on Monday, adding that the deal would help its customers “to unleash the full potential of artificial intelligence”.
Core Scientific’s shares fell as much as 20 per cent on Monday — having rallied last month on a Wall Street Journal report of a potential takeover — while CoreWeave’s shares slipped nearly 5 per cent.
Core Scientific shareholders will receive 0.1235 of newly issued CoreWeave shares if the deal closes as planned in the fourth quarter of 2025. This fixed ratio means Core Scientific shareholders bear the risk of a CoreWeave share-price slide devaluing the transaction.
“The price appears low,” Cantor analysts wrote in a note, adding that the agreed share price for the takeover was only about 10 per cent higher than Core Scientific’s record high in November. “The implied acquisition multiple is too low, we are a bit underwhelmed with the agreed takeout price,” they wrote.
CoreWeave buys cutting-edge graphical processing units from Nvidia — which is also a shareholder and one of its biggest customers — and rents them out to large tech companies to power their AI usage.
While CoreWeave had a rocky reception when it floated its shares in March — scaling back both the size and valuation of its initial public offering — its shares have since rallied nearly 300 per cent. CoreWeave’s market capitalisation is currently about $75bn.
CoreWeave’s underwhelming debut was largely driven by concerns over its substantial debts and financial complexity, driven in part by the long-dated and expensive nature of its lease liabilities with Core Scientific.
The new deal could allay some of those concerns. CoreWeave claimed that the transaction would “eliminate” $10bn of lease costs and estimated that it could achieve $500mn of annual cost savings by 2027.
Both CoreWeave and Core Scientific began as cryptocurrency miners, but have pivoted to focusing on AI as demand for vast computing power and large data centres soars.
While the two companies share similar names and a history in the bitcoin mining space, they have operated as separate businesses until now.
Darin Feinstein, a former nightclub owner and noted cryptocurrency enthusiast, co-founded Core Scientific in 2017 to provide data centre capacity for computer-intensive bitcoin mining companies.
The company filed for Chapter 11 bankruptcy protection in 2022, when a cryptocurrency crash roiled its biggest customers, and Feinstein stepped down as group co-chair in 2023.
Crypto miners run powerful computing sites where they solve complex mathematical puzzles in order to authenticate transactions and produce digital coins. These data centres are in high demand because the powerful graphics processing chips are used in both crypto mining and AI processing, while large computing facilities are expensive to build from scratch.
CoreWeave said Monday’s deal would gave it the “potential to repurpose or divest” Core Scientific’s crypto mining business “over the medium-term horizon”.
Intrator further underscored the pivot away from crypto, telling investors: “We are not looking to expand our footprint into cryptocurrencies.”
