As AI infrastructure companies scramble to obtain power supplies to support their soaring workloads, CoreWeave will purchase cryptocurrency miner Core Scientific in an all-stock deal valued at around $9 billion, the company announced on Monday.
The purchase demonstrates how artificial intelligence firms are attempting to reuse the energy-intensive websites and power contracts that Bitcoin miners created during the cryptocurrency boom, going beyond conventional data centers.
More than $10 billion in future lease overhead that must be paid for current contractual sites over the next 12 years would be immediately eliminated thanks to the transaction, according to CoreWeave.
The offer denotes a premium of around 66% to Core Scientific’s stock closing price before the initial news of possible purchase negotiations in late June, and it is valued at $20.40 per share.
Before the bell, shares of Core Scientific dropped 15%, and Nvidia, which recently backed CoreWeave, was down 4%.
According to the companies, the sale is anticipated to close in the fourth quarter, and at that point, the exact price will be decided.
CoreWeave began as an Ethereum-focused cryptocurrency miner in 2017 and switched to artificial intelligence a few years later.
After Ethereum’s 2022 update, “The Merge,” reduced miner incentives, it shut down its mining operations.
According to its IPO prospectus, CoreWeave’s revenue has increased at a dizzying rate, more than doubling in the past year.
Core Scientific, which declared bankruptcy in late 2022 due to a precipitous decline in bitcoin prices and skyrocketing energy expenses, is making a comeback with the transaction.
Early in 2024, the corporation emerged from bankruptcy.
In June of last year, CoreWeave made an unsolicited, non-binding offer to Core Scientific to buy all of the company’s outstanding stock.
