CoreWeave, Core Scientific shares sink after companies confirm $9 billion deal amid AI datacenter boom

AI cloud computing giant CoreWeave (CRWV) said Monday it would acquire data center provider Core Scientific (CORZ) in an all-stock transaction valued at $9 billion.

The deal will see Core Scientific investors granted 0.1235 shares of CoreWeave for each share of Core Scientific.

Shares of both companies fell sharply following the announcement, with CoreWeave stock falling 4.5% and Core Scientific shares dropping as much as 20%. Core Scientific shares had gained about 50% since The Wall Street Journal first reported a deal was in the works in late June.

The deal, which is set to be completed in Q4, will expand CoreWeave's capabilities to support large-scale AI development by bringing in a potential two gigawatts or more of power capacity in-house through Core Scientific's nationwide data center infrastructure, the company said in a release.

CoreWeave added that the move will expand its vertical expansion across the AI supply chain, adding energy infrastructure that provides runway for the significant power demands of AI cloud computing technology.

"Verticalizing the ownership of Core Scientific’s high-performance data center infrastructure enables CoreWeave to significantly enhance operating efficiency and de-risk our future expansion, solidifying our growth trajectory," CoreWeave CEO and chairman Michael Intrator said in a release.

The deal is also set to eliminate $10 billion or more in future overhead from leasing costs for sites CoreWeave currently contracts from Core Scientific while bringing in approximately $1.6 billion in assets, CoreWeave said in an investor presentation outlining deal specifics. CoreWeave predicts the deal will be leverage-neutral for its balance sheet.

CoreWeave went public earlier this year in one of the year's highest-profile IPOs, marking a rebound for new deals defined by some of the biggest companies going public and garnering the most support from investors. The company now sports a market cap north of $75 billion. The company was valued at closer to $20 billion in its last private fundraising round.