Core Scientific Surges After Turning Down a $1 Billion Acquisition Proposal
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Core Scientific Rejects $1 Billion Takeover Offer from CoreWeave
Bitcoin miner Core Scientific Inc. has declined a $1 billion acquisition proposal from artificial intelligence startup CoreWeave Inc. This decision follows closely on the heels of a partnership announcement between the two companies, which is expected to generate approximately $3.5 billion in revenue.
Core Scientific, based in Austin, Texas, stands out as one of the largest digital-asset miners by computing power. The company possesses extensive data center capacity, which can be adapted to high-performance computing (HPC) facilities designed to support generative AI applications. On Monday, CoreWeave proposed acquiring the mining firm for $5.75 per share in cash. Despite this enticing offer, Core Scientific’s shares surged to $8.30 on Thursday, experiencing a 16% increase. The stock has seen a remarkable rise of about 70% since the initial takeover proposition. Notably, Core Scientific had just emerged from bankruptcy protection in January.
Data Center and GPU Shortages Amid AI Boom
The surge in AI technology has led to an unprecedented shortage of data-center space and the graphics-processing unit (GPU) chips essential for AI operations, coupled with the need for sufficient electricity to power these advancements. A fresh report from the commercial real-estate firm CBRE Group indicates that approximately 83% of data-center capacity currently under construction has been pre-leased, with AI enterprises and cloud-service providers driving this demand.
Core Scientific’s Board Responds
Core Scientific’s board firmly dismissed CoreWeave’s proposal, stating it significantly undervalues the company and does not serve the best interests of its shareholders. The mining company emphasized its significant capacity for HPC operations, identifying about 500-megawatt capacity, making it one of the largest digital infrastructure providers, even when compared to traditional data centers.
The acquisition offer followed a series of 12-year contracts between the two firms, wherein Core Scientific committed to supplying 200-megawatt capacity to power CoreWeave’s GPUs. This announcement of the partnership saw Core Scientific’s shares soar by 40% on Tuesday.
