CoreWeave Offered a Crypto Miner $9 Billion to Gain Data Centers—But Got Rejected

Crypto miner Core Scientific terminated a $9 billion deal yesterday for its sale to AI cloud-computing company CoreWeave. After months of investor and proxy campaigns battling the agreement, shareholders voted against the proposal. 

While CoreWeave shares fell 3.9 percent in afternoon trading, the price of Core Scientific’s stock rose slightly. 

The deal was first announced in July, with CoreWeave hoping to obtain the energy and data center capacity needed to power its raising demand. CoreWeave already rents data centers and computing power from Core Scientific, so the acquisition meant it would own those spaces, opening up opportunities to scale its business.

On October 15, Core Scientific’s board urged shareholders to vote for the agreement, stating it had “unanimously determined” the deal would be optimal for stockholders.

But Two Seas Capital, which claims to be the largest of Core Scientific’s active shareholders, said it would vote against the deal on the basis of sale process, deal structure, and valuation concerns. The adviser said the sale “materially undervalues” Core Scientific, and warned that the fixed exchange ratio would expose its shareholders to the price performance of CoreWeave’s shares.

Another proxy advisory firm, Institutional Shareholder Services, expressed a similar stance. It suggested Core Scientific should remain a standalone company per its recent success. 

Yesterday wasn’t the first time Core Scientific has rejected a CoreWeave deal. In June 2024, the company turned down CoreWeave’s all-cash buyout offer.

Some analysts hypothesize that shareholders believe their companies are worth more right now because of the current high stock values of AI companies.

“[Shareholders] believe their value should be higher based on current valuations of comparable companies, which we see as more a sign of AI trade froth than actual economic value,” said Gil Luria, analyst at financial services partner D.A. Davidson. 

Michael Intrator, co-founder, chairman, and CEO of CoreWeave, commented on the terminated deal in a Thursday press release.

“We respect the views of Core Scientific stockholders and look forward to continuing our commercial partnership,” he says. “CoreWeave’s strategy remains unchanged. We will continue to execute with discipline against our roadmap to create long-term shareholder value, including through opportunistic and strategic M&A.”