Core Scientific Shareholders Reject $9 Billion Merger with CoreWeave
Core Scientific CoreWeave merger
The decision marks a significant setback for CoreWeave, the fast-growing AI infrastructure company whose proposed acquisition aimed to consolidate control over critical computing capacity across the United States. Institutional Shareholder Services (ISS) had advised investors to reject the transaction, citing valuation concerns and high volatility in CoreWeave’s share price.
Shareholders Say the Deal Undervalues Core Scientific
Several major shareholders, including hedge fund Two Seas Capital, argued that the merger undervalued Core Scientific’s long-term prospects. In a letter to shareholders, Two Seas founder Sina Toussi urged investors to reject what he called a “short-sighted” deal, writing that they faced “an easy choice: reject the transaction and participate in one of the most incredible growth opportunities in the history of the capital markets.”
Under the proposed agreement, Core Scientific shareholders were to receive 0.1235 CoreWeave shares for each of their own, with no downside protection if CoreWeave’s stock price fell. Given that CoreWeave shares have swung wildly since going public, investors said the fixed-ratio structure failed to provide sufficient certainty or value.
CoreWeave Responds, Pledges to Continue Partnership
CoreWeave CEO Michael Intrator acknowledged the decision and said the company would continue working with Core Scientific as a commercial partner. “We respect the views of Core Scientific stockholders and look forward to continuing our partnership,” Intrator said, while adding that CoreWeave will “pursue other deal opportunities” to meet its infrastructure growth goals.
CoreWeave had estimated that the merger would have eliminated $10 billion in future leasing expenses, helping it secure additional data center capacity needed to fulfill contracts with OpenAI and Meta. The collapse of the deal could complicate those expansion plans and limit CoreWeave’s ability to deliver on its ambitious growth targets.
AI Data Center Expansion Faces New Uncertainty
CoreWeave, based in New Jersey, has been attempting to evolve from a GPU hardware provider into a “full-stack” AI cloud platform through aggressive acquisitions. The company’s stock has surged more than 230% since its public debut earlier this year, reflecting investor enthusiasm for AI infrastructure. Core Scientific’s shares, meanwhile, have climbed about 40% year to date.
The termination of the merger highlights growing tension in the AI data center market, where valuations have skyrocketed and competition for computing capacity is fierce. Analysts say the failed deal highlights a widening gap between AI infrastructure providers and investors who are wary of excessive valuations and consolidation risk.