CoreWeave announced on Monday that it has decided to buy Core Scientific, a crypto mining firm in an all-stock deal valued at $9 billion.The cloud computing platform is following the trend of AI infrastructure firms racing to secure energy and data centre capacity needed to power surging demand.How will crypto mining firm supercharge CoreWeave?The core of the deal lies in the urgent need of AI companies to expand their computing infrastructure, Reuters reported.Amidst this growing demand, bitcoin miners’ energy-intensive sites and power contracts, built during the crypto boom gained traction.Also Read | BlackRock expands realty holdings, buys ElmTree Funds with $7.3 bn in assetsThe deal will immediately eliminate more than $10 billion of cumulative future lease overhead to be paid for existing contractual sites over the next 12 years, CoreWeave said.Deal details and market reactionThe offer values Core Scientific at $20.40 per share, representing a premium of around 66 per cent compared to the stock’s closing price before reports of the deal emerged in late June.Core Scientific stockholders will receive 0.1235 newly issued CoreWeave stock for each share they hold.Following the announcement, Core Scientific’s shares saw a steep drop of 22 per cent in morning trading, while Nvidia-backed CoreWeave was last down 4.5 per cent.Also Read | How much energy does your AI prompt use? I went to a data center to find out.The deal is expected to close in the fourth quarter of this year, with the final price to be determined at that time.Setting the bar for bitcoin minersBitcoin miners have moved beyond their traditional area of cryptocurrency, tapping into the AI boom by leasing power and data center space to meet rising demand from AI workloads.This acquisition is expected to set the bar for bitcoin miners looking for an opportunity of shifting to AI, Bernstein analyst Gautam Chhugani told Reuters, adding that power remains the biggest hurdle in AI data center expansion.CoreWeave — crypto mining to AICoreWeave was originally founded as an Ethereum-focused crypto miner in 2017. However, the firm pivoted to AI a few years later.It closed its mining business after “The Merge”, Ethereum’s 2022 upgrade, reduced rewards for miners.CoreWeave’s revenue has grown quickly, climbing more than eight-fold last year, according to the news agency.Turnaround opportunity for Core ScientificThe deal also marks a turnaround opportunity for Core Scientific, which filed for bankruptcy in late 2022 following a steep drop in bitcoin prices and rising energy costs.The company emerged from bankruptcy in early 2024 and, like several other bitcoin miners, has been seeking a way to capitalise on the AI boom.Core Scientific initially declined the takeover offer from CoreWeave in June 2024, citing that it was significantly undervalued.Also Read | States are rolling out red carpets for data centers. 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CoreWeave enters the data center competition: The Nvidia-supported cloud computing company plans to acquire Core Scientific for $9 billion.
