Core Scientific Shareholders Reject Proposed Merger with Coreweave
Shareholders of Core Scientific, a Bitcoin mining company, voted against a proposed $9 billion all-stock merger with AI computing firm Coreweave during a meeting on Thursday.
According to a statement from Core Scientific, the necessary votes to approve the merger were not obtained at the special meeting of stockholders.
On the stock market, shares of Coreweave, which is publicly traded on Nasdaq and focuses on AI cloud computing, saw a nearly 4% decline on Thursday, while Core Scientific shares increased by 0.3%.
Core Scientific has been approached for comments regarding the merger outcome. Michael Intrator, Coreweave’s co-founder and CEO, stated that the company respects the shareholders’ views and looks forward to continuing their commercial relationship.
The merger, first introduced in July, was expected to provide Coreweave with 1.3 GW of power from Core Scientific’s data centers, with an additional potential expansion of 1 GW.
Intrator previously noted that the partnership would enhance Coreweave’s capabilities in supporting customers with AI initiatives. Similarly, Adam Sullivan, the CEO of Core Scientific, stated that the collaboration would facilitate access to high-quality infrastructure for companies involved in AI while aiming to maximize shareholder value.
However, some investors at Core Scientific were skeptical, believing the deal undervalued the company’s prospects in Bitcoin mining.
As Bitcoin mining has become increasingly challenging and costly, rewards have diminished due to the halving event, which reduced Bitcoin earnings from 6.25 to 3.125. Even with rising Bitcoin prices, these factors are affecting profitability, prompting miners to explore alternative revenue streams.
Many miners have had to sell their Bitcoin or diversify into sectors like high-performance computing for AI to sustain operational costs. Yet, experts indicate that setting up AI data centers is complex and requires advanced heating and cooling systems, unlike those typically used for Bitcoin mining.
