TLDR
- CoreWeave announced a $9 billion all-stock acquisition of Core Scientific, a data center infrastructure provider
- The deal eliminates $10 billion in future lease obligations and provides 1.3 gigawatts of power capacity
- CoreWeave stock fell 3% while Core Scientific dropped 18% following the announcement
- Stifel downgraded CoreWeave from Buy to Hold despite raising price target to $115
- Transaction expected to close in Q4 2025 pending regulatory and shareholder approval
CoreWeave made headlines Monday with its announcement to acquire Core Scientific in a massive $9 billion all-stock transaction. The deal represents a strategic move by the AI cloud infrastructure company to expand its data center footprint and reduce operational costs.
CoreWeave is dropping $9 billion on the data-center operator Core Scientific in an effort to gain more direct control over the physical assets powering the artificial-intelligence boom https://t.co/LKMAjsd3Sr pic.twitter.com/RH6uxed7B4
— Bloomberg TV (@BloombergTV) July 7, 2025
The acquisition comes with a fixed exchange ratio of 0.1235 CoreWeave shares for each Core Scientific share. This values Core Scientific at $20.40 per share, representing a 66% premium to its closing price before deal talks surfaced.
Market reaction was swift but negative. CoreWeave shares dropped 3% in Monday’s trading session while Core Scientific plummeted nearly 18%. The stock movements came despite both companies rallying at the end of June when the Wall Street Journal first reported acquisition talks.
Financial Impact and Cost Savings
The deal promises substantial financial benefits for CoreWeave. The company projects eliminating approximately $10 billion in future lease obligations over the next 12 years. CoreWeave CEO Mike Intrator emphasized this advantage, stating the company won’t be paying rent for the next 15 years.
CoreWeave also expects to achieve $500 million in annual run-rate cost savings by the end of 2027. These savings come from owning rather than leasing data center capacity, a model that should improve operating efficiency.
The transaction gives CoreWeave ownership of 1.3 gigawatts of gross capacity across Core Scientific’s U.S. data center network. An additional gigawatt remains available for future expansion plans.
Of Core Scientific’s total capacity, 840 megawatts are already allocated to CoreWeave contracts at five locations. This existing relationship dates back to 2018 when the companies first began working together.
Strategic Positioning in AI Infrastructure
The acquisition transforms CoreWeave into a vertical supplier of data center infrastructure for AI and high-performance computing workloads. This vertical integration strategy mirrors approaches used by hyperscale cloud providers like Amazon Web Services.
Core Scientific brings more than just infrastructure to the table. The company employs over 300 people and has focused increasingly on high-performance compute workloads since emerging from bankruptcy in 2024.
CoreWeave gains the option to divest Core Scientific’s cryptocurrency mining business after the deal closes. This mining operation generated 89% of Core Scientific’s first-quarter revenue. Alternatively, CoreWeave can convert these facilities to handle AI workloads.
The conversion process for cryptocurrency sites costs less than building new AI data centers from scratch. Intrator noted that CoreWeave is already in the middle of an upgrade with Galaxy Digital, demonstrating the feasibility of this approach.
CoreWeave’s finance chief Nitin Agrawal highlighted another benefit. The company will be able to pursue investments from infrastructure-oriented vehicles and other sources that could lower its cost of capital. As of March 31, CoreWeave’s weighted average rate on short-term debt was 10.1%.
The timing of this acquisition reflects CoreWeave’s evolution since going public in March. The company now generates nearly $1 billion in quarterly revenue and has built a broad investor base. Its shares are worth four times more than at its Nasdaq debut.
Core Scientific shareholders will own less than 10% of the combined company after the transaction closes. The deal requires regulatory and shareholder approval, with completion expected in the fourth quarter of 2025.
This isn’t the first time these companies considered joining forces. Core Scientific rejected an unsolicited offer from CoreWeave last year to buy all outstanding shares.
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