The Wall Street Journal: CoreWeave restarts acquisition of Core Scientific

Gate News bot message, The Wall Street Journal (WSJ) reported on June 26, citing informed sources, that CoreWeave is in negotiations for the acquisition of Bitcoin (BTC) miner transformation computing host company Core Scientific. This cloud infrastructure company attempted to acquire the miner for $5.75 per share in June 2024, but withdrew the acquisition after the Core Scientific board deemed the price inappropriate.

CoreWeave went public in March, with a capital of $75 billion. Microsoft is its largest customer, accounting for 62% of its 2024 revenue, and it rents Nvidia GPUs to enterprise clients, including Meta Platforms and IBM.

Executives at Core Scientific believe last year's $1 billion proposal was "unsolicited" and below intrinsic value, and then signed a 12-year hosting agreement, committing the miner to provide 200 megawatts (MW) of power for CoreWeave's high-performance computing cluster.

The board members stated that the arrangement would generate approximately $3.5 billion in cumulative revenue and help diversify revenue after the Bitcoin halving in April 2024, reducing reliance on block subsidies.

Core Scientific has 16 MW of CoreWeave GPUs at its Austin campus and plans to expand in phases at multiple sites in Texas and Oklahoma.

Sources say that if negotiations go smoothly, both parties plan to finalize the terms within a few weeks. However, neither side has disclosed the price parameters.

Bankers paying attention to this situation point out that Core Scientific's rapid shift to artificial intelligence infrastructure, combined with the limited power data center market, may prove that its premium is far higher than the undisturbed value of the Miner.

CoreWeave CEO Mike Intrator seeks to expand capacity to meet the cloud AI demand that exceeds the current inventory of hyperscale providers.

Core Scientific controls approximately 724 megawatts of contracted power within the United States and is one of the largest owners of immersion-cooled mining equipment in North America.

Miners align their ability to repurpose some of the load for GPU computing with CoreWeave's efforts to ensure low-cost power and ready-made infrastructure, avoiding years of greenfield construction.

If the negotiations are successful, CoreWeave will acquire a batch of Bitmain S21 miners, as well as a batch of brownfield mining sites that can be converted into GPU racks. Core Scientific shareholders will receive cash or stock, with the specific ratio yet to be determined.