CoreWeave Moves to Expand AI Cloud Dominance with $9 Billion Acquisition of Core Scientific
In a significant consolidation move within the artificial intelligence cloud infrastructure sector, CoreWeave announced on Monday its plan to acquire data center provider Core Scientific in a blockbuster $9 billion all-stock deal. The merger is poised to reshape the competitive landscape of AI-focused cloud services, promising enhanced operational synergies and expanded capacity.
Unpacking the Deal: What It Means for CoreWeave and the Industry
The all-stock transaction marks a strategic attempt by CoreWeave to secure control over critical data center assets and power capacity currently leased from Core Scientific. By bringing Core Scientific's infrastructure in-house, CoreWeave expects to eliminate approximately $10 billion in future lease liabilities, a move that CEO Mike Intrator emphasized will substantially boost the company’s operating efficiency.
"We're not paying rent for the next 15 years," Intrator told CNBC, highlighting the financial leverage gained through ownership. The deal is anticipated to close in the fourth quarter of 2025, subject to regulatory approvals and shareholder endorsements.
Amplifying Capacity: Power, Real Estate, and AI Workload Readiness
Post-acquisition, CoreWeave will control an impressive 1.3 gigawatts of gross power capacity across Core Scientific’s U.S. data centers, with an additional gigawatt earmarked for future expansion. Of this, 840 megawatts are already allocated to CoreWeave’s contracts at five key locations, according to CoreWeave CFO Nitin Agrawal.
A notable feature of the deal is CoreWeave’s option to divest Core Scientific’s cryptocurrency mining operations, which have historically accounted for nearly 89% of Core Scientific’s revenue. The company plans to repurpose this infrastructure to support AI workloads, a pivot Intrator feels is more cost-effective than building new AI data centers from scratch.
Strategic Synergies and Financial Implications
Beyond operational benefits, the acquisition enhances CoreWeave’s position to attract investment from infrastructure-focused funds, potentially lowering its cost of capital. Currently, CoreWeave’s short-term debt bears an interest rate of 10.1%, a figure the company aims to improve through strategic financing.
Core Scientific, which reemerged from bankruptcy and relisted on Nasdaq in 2024, brings over 300 employees and a longstanding partnership dating back to 2018 with CoreWeave. The merger marks a new chapter as CoreWeave continues scaling as a publicly traded company with quarterly revenues reportedly reaching nine figures.
Market Reactions and Shareholder Impact
Following the announcement, CoreWeave shares dipped 3% while Core Scientific’s stock saw an 18% decline, perhaps reflecting initial market hesitation to digest the deal’s scope. Prior to the announcement, both companies’ shares had rallied following early reports of acquisition talks.
Core Scientific shareholders will receive 0.1235 CoreWeave shares per share held, valuing Core Scientific stock at approximately $20.40—a substantial 66% premium over pre-talks closing price. Post-merger, Core Scientific shareholders will hold less than 10% of the combined entity.
Contextualizing the Acquisition in the Broader Cloud Infrastructure Landscape
This acquisition resonates against the backdrop of intensifying competition with hyperscale cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud Platform. Unlike these titans, CoreWeave employs a hybrid infrastructure approach, combining owned and third-party data centers—a strategy Intrator argues offers flexibility and cost benefits.
"Hyperscalers have reasons to mix owned and third-party infrastructure, and the same reasoning applies to us," Intrator explained. This deal accelerates CoreWeave’s evolution from a primarily leasing model to a more asset-heavy approach, potentially driving better margins and competitive positioning in AI cloud services.
Looking Ahead: Challenges and Opportunities
- Integration Complexity: Successfully merging the two companies’ operations and aligning their strategic goals will be critical.
- Regulatory Oversight: Given the deal’s scale and impact on the nascent AI infrastructure market, regulatory scrutiny is expected.
- AI Workload Expansion: The shift from crypto to AI workloads signals a broader industry trend favoring AI-driven data center utilization.
- Investor Expectations: Delivering on promised synergies and financial targets will influence investor confidence and stock performance.
Editor’s Note
This transaction underscores the rapid maturation and consolidation within AI cloud infrastructure—a market pivotal to the future of computing and digital economies. CoreWeave’s move to internalize data center control reflects a broader industry recalibration, where owning physical assets confers strategic advantages amid surging AI demand. Yet, this raises probing questions: Can CoreWeave seamlessly transition Core Scientific’s cryptocurrency-focused infrastructure to AI purposes? How will regulators weigh the market power implications? And will this deal set a precedent for similar maneuvers in tech infrastructure? Observers should watch closely as this deal unfolds through 2025.
