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Two Seas Capital Opposes $9 Billion Core Scientific–CoreWeave Merger

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Two Seas Capital, the largest shareholder of crypto mining firm Core Scientific, announced it will vote against the company’s proposed $9 billion sale to AI-focused data center operator CoreWeave. The investment firm, which holds about 6.3% of Core Scientific’s shares, argues the deal “materially undervalues” the company and poses unnecessary risks to shareholders.

CoreWeave, which provides access to Nvidia-powered AI chips and data centers, agreed last month to acquire Core Scientific in an all-stock transaction valued at $20.40 per share. The deal aims to repurpose Core Scientific’s energy-intensive sites—originally built for cryptocurrency mining—to support growing AI infrastructure needs.

Two Seas says it is not opposed to a merger in principle but insists the board must secure terms that reflect the strategic worth of Core Scientific’s assets. The firm believes the current proposal “decidedly and unfairly favors CoreWeave.”

Core Scientific’s stock dropped over 17% when the merger was first announced, though it was marginally higher Thursday. CoreWeave’s shares rose 6% at the time of the announcement but remained unchanged on the latest news.

Core Scientific, which emerged from bankruptcy in early 2024, has been shifting its business model toward AI-driven energy utilization. The company previously rejected an unsolicited bid from CoreWeave in June 2024, citing undervaluation concerns.

AI’s Energy Gold Rush: Battling Bitcoin Miners for Power Supply

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As U.S. technology giants like Amazon and Microsoft rapidly expand their AI and cloud computing data centers, they are in fierce competition for a shrinking supply of electricity, often clashing with bitcoin miners who have long dominated energy-intensive operations. These data centers, projected to account for up to 9% of total U.S. electricity by the decade’s end, have sent AI and tech companies scrambling for power assets previously held by cryptocurrency miners. While some bitcoin miners are profiting by leasing or selling their power-connected infrastructure to tech firms, others are struggling as they lose access to the electricity they need to stay in business. Major players like Amazon have secured deals to repurpose mining sites for AI operations, while some miners, such as Core Scientific, are pivoting their facilities toward AI and cloud computing. However, the transition is not smooth for all miners, as retrofitting bitcoin mines to handle sophisticated AI data centers requires extensive infrastructure investment, leaving many unable to compete with the well-capitalized tech giants driving this energy land grab.