Core Scientific (CORZ) has turned down a $1 billion acquisition offer from CoreWeave, describing it as unsolicited and significantly undervalued. The proposal, which offered $5.75 per share, followed a recent agreement where Core Scientific would provide 200 megawatts of infrastructure to support CoreWeave’s high-performance computing (HPC) AI services for 12 years.

According to Core Scientific, after consulting with independent financial and legal advisors, the board concluded that the offer did not reflect the company’s growth prospects and long-term value creation potential. Emphasizing the unsolicited nature of the offer, Core Scientific intends to proceed with its previously announced contracts with CoreWeave, projected to generate over $3.5 billion in cumulative revenue. This move marks a strategic shift for Core Scientific, known primarily for bitcoin mining, as it diversifies into the AI data center space.

Core Scientific’s shares rose from approximately $4.84 to around $7.15 following the partnership announcement. Although the $5.75 per share offer from CoreWeave is higher than Core Scientific’s share price before the partnership announcement, it is lower than current prices, indicating the board's belief that the share price reflects its true value post-partnership.

Under the agreement, CoreWeave will finance all necessary infrastructure investments, estimated at $300 million, which will be offset against hosting payments until fully reimbursed. The partnership is expected to generate about $290 million in annual revenue, boosting Core Scientific’s earnings potential and enhancing shareholder value.

CEO Adam Sullivan highlighted that Core Scientific is well-positioned to meet the high demand for high-power sites, outpacing supply and surpassing greenfield data center projects. The partnership allows Core Scientific to diversify its portfolio between Bitcoin mining and alternative compute hosting, optimizing cash flow and risk management while maintaining exposure to Bitcoin’s potential growth.

Core Scientific’s expansion into AI infrastructure aligns with industry shifts following Bitcoin’s recent halving event, which reduced miner rewards and prompted firms to explore additional revenue streams. The company’s financial recovery post-bankruptcy restructuring has been supported by rising Bitcoin prices and hash rates. Since resuming trading on Nasdaq in January, Core Scientific’s shares have shown substantial gains, reflecting investor confidence in its strategic direction.

The partnership with CoreWeave builds on a longstanding collaboration dating back to 2019. Earlier this year, Core Scientific delivered 16 MW of HPC hosting capacity to CoreWeave ahead of schedule at its new Austin data center, underscoring the strategic importance of AI and cloud computing in Core Scientific’s future growth strategy.