| | | Did CoreWeave Acquire a Gold Mine? | | By Nick Rokke, Senior Analyst, The Bleeding Edge | | |
In one of the largest acquisitions of 2025, CoreWeave (CRWV) just announced a $9 billion all-stock deal to acquire Core Scientific (CORZ). | | On paper, this is an AI infrastructure company buying a bitcoin miner. But this deal has nothing to do with crypto. | | Core Scientific wasn’t just another mining outfit. It owns something far more valuable in today’s market – fully operational data centers already wired to the grid. | | And that’s the one thing even the biggest players in AI can’t get enough of. | | Hyperscalers like Microsoft, Google, and Amazon are spending hundreds of billions of dollars this year building out new AI-scale data centers. But there’s a catch… | | Even if they break ground today, most utilities are sitting on multi-year backlogs – some as long as four years – just to get power hooked up. | | That’s why CoreWeave’s move makes so much sense. The bottleneck in AI compute now isn’t really GPUs. Production has drastically ramped up over the past couple of years. But the bottleneck now is the electrical infrastructure to power these GPUs. | | This merger is a power grab. And it’s just more proof that the AI data center boom is just getting started. | | From Controversial IPO to Top Performer | | CoreWeave’s IPO was one of the most talked-about of the year… But not always for the right reasons. | | It went public on March 28, right near the market lows… And during peak uncertainty around AI tariffs. Demand was weak. Investors sat on cash. | | NVIDIA stepped in with a $250 million investment at $40 per share. This was widely seen as an emergency backstop to support one of its biggest customers. | | | | But when markets regained their footing, CoreWeave shares took off. | | | | But underneath the headlines is a deeper reality. CoreWeave is building the backbone of the AI economy. But doing so isn’t cheap. | | And as Jeff pointed out, it takes billions in capital to build AI-scale data centers from scratch. And CoreWeave has incurred a massive debt load to build the data centers. And the problem is that the revenue from GPU rental doesn’t start flowing until those facilities are fully online. | | That means CoreWeave is highly leveraged and racing the clock. | | But this latest acquisition? It’s more than operationally smart. It’s financially strategic. | | A Relationship Years in the Making | | CoreWeave and Core Scientific weren’t strangers. | | The two companies first partnered back in 2019, when Core Scientific began hosting CoreWeave’s GPUs. That relationship was a turning point. | | Core Scientific quickly realized that steady revenue from high-performance compute (HPC) contracts beat the wild swings of bitcoin mining. So the partnership grew. | | And it accelerated sharply in 2023 during the AI explosion. | | It began with a small 16-megawatt (MW) contract. But Core Scientific delivered 30 days ahead of schedule, proving to be a reliable partner. From there, Core Scientific expanded its support to 200 MW… with options for an additional 500 MW. | | By the end of 2024, Core Scientific CEO Adam Sullivan estimated the deal’s revenue potential at $10 billion over 12 years. | | CoreWeave was 100% of Core Scientific’s HPC revenue. These two companies were already tied at the hip. | | CoreWeave tried to buy Core Scientific last year for $5.75 per share. That offer was rejected. Now, under this latest all-stock deal, Core Scientific is being acquired at an implied value of $20.40 per share. Now that number will float, since shareholders will receive 0.1235 shares of CoreWeave for each share of CORZ. | | So why does this deal make sense at $9 billion? | | Because CoreWeave is buying assets it already uses… and at the same time, cleaning up its balance sheet. |
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| Unlocking Billions in New Capacity | | Here’s the financial kicker. At the end of Q1, CoreWeave carried $24 billion in future lease obligations on top of more than $8 billion in traditional debt. | | That’s a staggering load for a company that IPO’d with a $30 billion enterprise value… and now trades near $87 billion. | | By acquiring Core Scientific, CoreWeave moves from leasing data center capacity to owning it outright. | | By spending $9 billion, they eliminate $10 billion of future payments. And it unlocks $5 billion in new borrowing capacity through secured debt tied to owned assets. | | Also, the whole deal was done in stock. Yes, it’s dilutive. But issuing shares is a better option than taking on even more debt. Especially for a company already carrying this kind of financial load. And after the recent runup in prices, CRWV shares are trading at a hefty premium to fair value. | | This acquisition will create a much stronger company than the two were individually. | | Why CoreWeave Is Expanding So Aggressively | | The answer comes down to one thing: explosive revenue growth. | | In the first quarter of 2025, CoreWeave’s revenue grew 420% year-over-year. And full-year projections show another 160% increase. That figure is expected to double again in 2026. | | These aren’t hopes or hypotheticals. This growth is contracted. | | As of Q1, CoreWeave reported a $25.9 billion backlog. That includes: | - An $11.2 billion contract with OpenAI
- A $4 billion expansion with a major AI enterprise customer – likely Microsoft
- A $2.3 billion contract with NVIDIA
| | And that’s what this merger is really about. CoreWeave now owns the 590 megawatts (MW) of capacity it previously leased from Core Scientific. It also gains 300 MW of high-density capacity capable of running GPU-heavy AI workloads – and another 1 gigawatt (GW) of power capacity ready for future buildouts. | | This is critical infrastructure that’s wired, powered, and ready to deploy. | | A Microcosm of a Massive Trend | | This demand isn’t limited to just one company. | | Just last week, Oracle announced a $30 billion data center contract. This is part of its Stargate partnership with OpenAI and SoftBank. It’s one of the largest cloud infrastructure deals ever recorded. And it could send Oracle’s cloud business up 6x by 2028. | | This isn’t a one-off. It’s the beginning of a historic capital cycle in AI infrastructure. | | And the AI buildout is going global. As we’ll discuss in more detail during the NVIDIA section, CEO Jensen Huang forecasted 10x growth in European AI infrastructure by 2026. | | At its AI Day event in June, Marvell Technologies shared its forecast for global AI data center capex in 2028: |
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| Over $1 trillion in spending – in a single year. |
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| We believe that number is entirely plausible as we move toward artificial general intelligence (AGI) and, eventually, artificial superintelligence (ASI). If you’ve been reading The Bleeding Edge daily, you’ll already understand this. | | | | | | And this investment cycle isn’t just a tech story. It’s now a macroeconomic force. | | According to research from Apollo, AI data center spending added one full percentage point to U.S. GDP growth in Q1 2025. That’s not a future projection – it’s already happening. | | | | Source: Bloomberg, Macrobond, and Apollo | | The AI boom is here. It’s real. And it’s accelerating. Companies operating AI data centers will thrive in the coming years. | | A Word of Warning | | But just because we’re bullish on the trend doesn’t mean every stock in the space is worth owning. | | Many of these companies are starting to realize they can make more money leasing megawatts to AI hyperscalers than mining Bitcoin. On paper, it looks like a smart pivot. But the reality is, most of them aren’t equipped for it. | | Hyperscalers like Microsoft, Amazon, and Oracle are looking for massive, high-density facilities purpose-built for GPU workloads. They’re building data centers at the scale of one gigawatt or more. The scattered, underpowered facilities owned by smaller miners simply don’t meet the bar. | | And most of these miners are still small, cash-burning operations that remain unprofitable. So while the narrative sounds exciting, the risk is still high. | | That said, there are a few exceptions worth watching. Bitfarms (BITF), for example, is one of the few miners actively converting all of its U.S. sites to high-performance compute. It controls over 1.4GW of power capacity and recently secured $250 million in financing from Macquarie to fund its transition. That kind of scale and capital make them a legitimate acquisition target. | | Cipher Mining (CIFR) is another company preparing for the AI shift. With a 2.8-gigawatt development pipeline and multiple enterprise customers already under NDA, it’s positioning itself for a serious move into the AI space. | | But these are the outliers. | | Most miners are still in the early innings of this transition. Terawulf (WULF), for instance, has less than 100 megawatts currently configured for AI workloads. While it may ramp up over time, it’s not at a scale that would attract a top-tier hyperscaler. | | And even among the larger players, we need to tread carefully. CoreWeave and Core Scientific may have struck a strategic deal, but the market’s reaction was telling. Shares of both companies fell after the announcement. | | That’s a clear sign investors are skeptical of their viability. Especially given CoreWeave’s heavy debt load and projected $17 billion in cash burn this year. | | So while we’re incredibly bullish on the AI data center buildout, we’re also selective. | | Because the biggest opportunity here isn’t just in who owns the land or leases the power. It’s in the companies that build the infrastructure – the hardware, the chips, the networking gear that powers every AI inference and model training run. | | And that starts with semiconductor companies, which are breaking out to new all-time highs. | | | | That’s where the real value is being created. And that’s where we’ve been focused in The Near Future Report and Exponential Tech Investor. We have positioned our readers in the leading-edge semiconductor companies that are quietly driving the AI revolution forward. | | This infrastructure cycle is just getting started. | | And for the right companies, it’s going to be a decade-long runway of growth. | | Regards, | | Nick Rokke
Senior Analyst,The Bleeding Edge | | |
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