Originally published on: August 06, 2024
Core Scientific’s stock (CORZ) saw a significant surge of over 12% in early trading on Aug. 6 as the company expanded its deal with CoreWeave, a leading artificial intelligence cloud provider.
The agreement includes CoreWeave ramping up its hosting deal with Core Scientific to accommodate additional Nvidia GPUs. In a recent announcement, Core Scientific revealed plans to provide around 112 extra megawatts to support CoreWeave’s GPU operations.
As of the latest update, Core’s shares are up by 12.1%, trading at $9.22 on the Nasdaq exchange. The company anticipates generating an additional $2 billion in revenue over the course of a 12-year hosting agreement with CoreWeave.
This expansion follows Core Scientific’s rejection of a buyout offer from CoreWeave just 60 days ago. Previously, the two companies had announced a $3.5 billion deal for Core Scientific to offer 200 MW of infrastructure for CoreWeave’s high-performance computing operations. Despite a subsequent unsolicited buyout bid, Core’s board dismissed the offer due to valuation concerns.
Earlier in the year, Core Scientific and CoreWeave had signed a lease agreement for a Tier 3 data center in Austin, Texas, potentially yielding over $100 million in revenue. The Austin facility, previously owned by Hewlett Packard, was expected to provide up to 16 MW of capacity for CoreWeave’s operations.
“We have now contracted with CoreWeave for a total of 382 megawatts of HPC infrastructure, reflecting the strong demand for high-power data center infrastructure,” stated Core Scientific CEO Adam Sullivan.
The combined revenue from all agreements between the companies now stands at an impressive $6.7 billion.
Core Scientific is gearing up to enhance its infrastructure to meet the increased demand in the coming months, with operations set to commence in the first half of 2026. CoreWeave will finance all necessary capital investments to convert the existing infrastructure into specialized HPC data centers.
Furthermore, the new agreement includes provisions for two five-year renewal terms, with the option for CoreWeave to expand the deal by an additional 118 MW at another Core Scientific site.
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