CoreWeave Pursues $4B Deal to Power AI Ambitions with Core Scientific

CoreWeave, the rapidly rising AI cloud infrastructure provider, is once again making headlines — this time for reigniting acquisition talks with bitcoin mining giant Core Scientific. According to a report by The Wall Street Journal, the companies are in advanced discussions that could lead to a deal in the coming weeks, pending negotiations.

The move marks a notable turn in a high-stakes courtship that began last year, when CoreWeave made an unsolicited offer to acquire Core Scientific for $1.02 billion. That bid, valued at $5.75 per share, was promptly rejected by Core Scientific for undervaluing the company. Fast-forward a year, and Core Scientific’s market value has climbed to nearly $4 billion, with shares rising roughly 8% following the renewed acquisition chatter.

CoreWeave’s interest in the company is strategic. As AI workloads continue to demand massive computational power and access to stable energy supplies, former crypto mining operations like Core Scientific have become increasingly attractive targets. With expansive infrastructure already in place, these facilities offer AI players a fast track to scaling data centers without starting from scratch.

CoreWeave and Core Scientific already have history. Following the failed acquisition attempt in 2024, the companies entered a multi-decade partnership involving 12-year infrastructure contracts. Among them was a landmark deal in which Core Scientific committed to providing CoreWeave with 200 megawatts of power capacity to support its high-performance computing operations. That agreement alone signaled a convergence between the worlds of cryptocurrency and artificial intelligence — both of which depend on energy-intensive server farms.

The potential acquisition now appears to be a natural next step in that partnership. By bringing Core Scientific under its umbrella, CoreWeave would not only secure long-term access to critical power infrastructure but also strengthen its foothold in the competitive AI cloud race — a space dominated by the likes of Amazon, Google, and Microsoft.

While the exact financial terms of the revived offer have not been disclosed, market analysts suggest any deal would likely exceed the previous $1 billion bid, given Core Scientific’s increased valuation and rising relevance in the post-crypto AI landscape.

Still, a finalized agreement is not guaranteed. Regulatory scrutiny, shifting market conditions, or resistance from shareholders could delay or derail the talks. Neither Core Scientific nor CoreWeave has publicly commented on the latest developments.

The acquisition would mark another significant move in a broader trend: tech and AI companies consolidating energy assets and computing infrastructure once built for cryptocurrency mining. As AI continues to evolve and expand, the race to control the digital and physical backbones of computation is heating up — and CoreWeave is positioning itself at the center.

AI Boom Reshapes Tech Landscape: Bitcoin Miners Pivot to Power the Future

In a striking shift that’s reshaping the tech industry, bitcoin miners are rapidly pivoting their operations to serve the burgeoning artificial intelligence (AI) sector. This transition, driven by dwindling profitability in cryptocurrency mining and an insatiable demand for AI computing power, presents intriguing opportunities for small cap investors eyeing the next big tech wave.

The epicenter of this transformation is taking shape in Abilene, Texas, where Houston-based Lancium and Denver-based Crusoe Energy Systems recently announced a multibillion-dollar project to construct a 200-megawatt data center. This facility, designed specifically to meet the unique needs of AI companies, represents the first phase of an ambitious 1.2-gigawatt build-out. Upon completion, it’s poised to become one of the world’s largest AI data center campuses, signaling the scale of investment flowing into AI infrastructure.

This pivot isn’t isolated to Abilene. Across the United States, bitcoin miners are repurposing their extensive data centers, fiber connections, and power access to serve the compute-intensive needs of AI operations. The timing couldn’t be more opportune, as the recent bitcoin halving event has squeezed profit margins in the mining sector, prompting operators to explore new revenue streams.

The financial markets have taken notice. The combined market capitalization of 14 major U.S.-listed bitcoin miners hit a record $22.8 billion in mid-June 2023, adding $4.4 billion in just two weeks. This surge reflects investor optimism about the miners’ strategic pivot to AI.

Several small cap players are at the forefront of this trend. Bit Digital, for instance, now derives an estimated 27% of its revenue from AI-related services. The company recently inked a deal to supply Nvidia GPUs for an Iceland-based data center, projecting $92 million in annual revenue from this venture alone.

Hut 8, another player in this space, raised $150 million in debt to expand its data center portfolio for AI applications. The company has already secured commercial agreements under a GPU-as-a-service model, including revenue-sharing arrangements with customers.

Perhaps the most dramatic turnaround story is Core Scientific. After emerging from bankruptcy in January, the company has seen its fortunes reverse through partnerships with AI infrastructure provider CoreWeave. This strategic shift prompted B. Riley to upgrade Core Scientific’s stock to a “buy” rating, raising its price target from 50 cents to $13.

The pivot to AI is not just about repurposing hardware; it’s also driving innovation in energy management. Lancium, for example, has developed patented technology that allows for flexible energy consumption, helping to balance power grids reliant on volatile renewable sources. This capability is crucial as the AI sector’s energy appetite grows. The Electric Power Research Institute projects that data centers could consume up to 9% of the U.S.’s total electricity by 2030, up from about 4% in 2023.

To meet this demand sustainably, industry leaders are exploring various solutions. Some, like TeraWulf, are tapping into nuclear energy to power their operations. OpenAI CEO Sam Altman has also voiced support for nuclear power as a key enabler of AI infrastructure.

For small cap investors, this industry-wide pivot presents a unique opportunity. Companies that successfully transition from bitcoin mining to AI infrastructure stand to benefit from the explosive growth in AI demand. However, it’s crucial to note that this shift comes with its own set of challenges, including high capital requirements for upgrading infrastructure and the need to develop new expertise in AI-specific technologies.

As the AI boom continues to reshape the tech landscape, savvy investors should keep a close eye on former bitcoin mining companies that are successfully pivoting to AI. These nimble players, with their existing infrastructure and growing AI capabilities, may well become the backbone of the AI revolution, offering potentially lucrative opportunities in the small cap space.