Amit Singh
3 min read
In This Article:
Shares of Core Scientific (CORZ), a major player in Bitcoin (BTCUSD) mining and a provider of digital infrastructure for high-performance computing (HPC), surged more than 33% on June 26, following The Wall Street Journal’s report of potential acquisition talks with AI hyperscaler CoreWeave (CRWV). The spike pushed Core Scientific’s market valuation to nearly $4.9 billion. That’s a staggering leap from CoreWeave’s rejected bid last year, which valued Core Scientific at just $1 billion.
While Core Scientific stock gained significantly, it could only be the beginning. If CoreWeave moves forward with acquiring Core Scientific, it will offer substantial strategic and financial benefits to CoreWeave. Thus, the deal could come at a hefty premium, potentially giving CORZ even more upside.
Earlier this year, Core Scientific expanded its partnership with CoreWeave, signing a $1.2 billion agreement for additional contracted revenue. The deal positions Core Scientific as a go-to provider of specialized data centers for demanding HPC tasks. With this latest agreement, CoreWeave now has about 590 megawatts of HPC infrastructure capacity contracted with Core Scientific across six sites. This expanded footprint reflects CoreWeave’s growing need for high-density computing environments.
The numbers behind the partnership are eye-catching. Over the 12-year term of the contract, Core Scientific expects to generate a total of $10.2 billion in revenue from CoreWeave. That long-term revenue stream reflects the scale and strategic importance of the relationship between the two companies.
For CoreWeave, acquiring Core Scientific makes financial sense. The company is on track to pay billions in lease fees to use Core Scientific’s data centers over the next decade and will not gain ownership of the infrastructure. A takeover would allow CoreWeave to convert those lease expenses into owned assets, potentially saving money and securing long-term control over critical HPC capacity.
The market took very different views of the two companies. While Core Scientific’s stock enjoyed investor enthusiasm, shares of CoreWeave edged slightly lower on June 26, ending the day down about 1%.
