Core Scientific shareholders voted down an all-stock acquisition offer from partner and competitor CoreWeave on Thursday. The offer was valued at nine billion dollars at the time. The decision followed a vote-no recommendation from the company’s largest shareholder, Sina Toussi of Two Seas Capital. This investment firm focuses on post-bankruptcy companies. Core Scientific itself had emerged from its bankruptcy in January 2024.
Both Core Scientific and CoreWeave share an early history in crypto mining. Core Scientific began as a crypto miner and continues that business today. CoreWeave also started as a miner but has since transitioned to serving AI workloads, aided by investor and partner Nvidia. Since its initial public offering, CoreWeave’s stock has soared, taking its market capitalization from fourteen billion dollars to sixty-six billion dollars today. Investors see it as a key player in the artificial intelligence sector, and the company has been using its highly valued stock for acquisitions.
Prior to the acquisition attempt, CoreWeave had already signed a twelve-year contract with Core Scientific valued at ten billion dollars to use its facilities for AI services. The subsequent acquisition offer was made at a premium to Core Scientific’s share price at the time. However, major investor Sina Toussi believes Core Scientific can transform into a company like CoreWeave on its own. In his opposition letter, he noted that investment in AI infrastructure has accelerated, driving up the valuations of Core Scientific’s peers. He questioned why shareholders would accept a deal worth only sixteen dollars and forty cents per share.
Following the vote, investors rejected the deal and CoreWeave walked away. Core Scientific’s stock price rose on the news, and the company now trades with a market capitalization of six point six billion dollars.
This move by investors to reject a major acquisition in hopes of a better future offer is seen by some as a sign that the market is in, or heading for, an AI bubble.
Meanwhile, CoreWeave continues its shopping spree. On the same day the acquisition fell through, CoreWeave acquired Marimo, an open source competitor to Jupyter Notebooks, for an undisclosed sum. PitchBook estimates that Marimo had raised about five million dollars. Python notebooks are developer tools that combine code, rich media, and explanatory text into a single, shareable file. They are often used for interactive data analysis and AI application development, which helps CoreWeave in its attempt to move up the stack from providing hosting services to building AI applications.