CoreWeave Proposes $1 Billion Buyout, Core Scientific Soars 38%

Key Points:

• CoreWeave plans to buy Core Scientific to boost AI capacity.
• They’ve signed 12-year contracts for CoreWeave’s infrastructure needs.
• CoreWeave recently raised $8.6 billion, valuing it at $19.1 billion.

According to Bloomberg, Cloud computing firm CoreWeave proposes to buy out Bitcoin miner Core Scientific for $5.75/share. The deal includes 12-year contracts for Core Scientific to provide CoreWeave with 200 megawatts of infrastructure.

CoreWeave, a private cloud computing firm, has put forward an all-cash offer to buy Bitcoin miner Core Scientific at $5.75 per share.

CoreWeave Proposes to Purchase Core Scientific

An anonymous source revealed that the bid was placed on Monday, marking CoreWeave’s strategy to enlarge its artificial intelligence data center capacity. Core Scientific shares witnessed a notable surge following the offer, with a peak increase of 38% to $6.70 in early Tuesday trading.

Following the offer, both companies acknowledged the signing of a series of 12-year contracts. Under these agreements, Core Scientific will furnish CoreWeave’s operations with around 200 megawatts of infrastructure.

Data center space and power are in high demand due to the AI boom, and Core Scientific is one of many Bitcoin miners seeking to exploit the situation to diversify beyond cryptocurrency.

High Demand for Data Centers Amid AI Boom

The person familiar with the matter divulged that CoreWeave’s proposal amounts to a 55% premium to Core Scientific’s volume-weighted average price over the three months leading up to May 31.

As of Monday’s close in New York, Core Scientific was valued at around $866 million, with a closing price of $4.87 per share. Both CoreWeave and Core Scientific have chosen not to comment on the potential buyout.

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CoreWeave Secures Major Funding, Boosts Valuation

The hosting agreement ranks as one of the biggest for a crypto miner. The contracts with CoreWeave could yield $3.5 billion in revenue, positioning Core Scientific as a significant infrastructure provider among traditional data centers. Core Scientific has supplied similar services to CoreWeave since 2019.

CoreWeave secured $8.6 billion in funding last month, including a $1.1 billion preferred equity deal that placed the startup’s valuation at $19.1 billion.

Other funds were secured through a $7.5 billion debt raise. Investors in CoreWeave include Coatue Management, Altimeter Capital, and Fidelity Management & Research Co.