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Hello everyone! This is Tom Carreras, the new voice behind The Node. You may have spotted my name here and there at CoinDesk, usually in feature pieces about bitcoin mining or crypto adoption in Latin America. Expect some changes — we want this missive to pack a big punch and to provide exclusive content and useful context that will help you digest the news of the day. |
AI is coming for bitcoin miners The big headline on this beautiful Monday is that bitcoin miner Core Scientific (CORZ) has accepted a $9 billion acquisition offer from AI firm CoreWeave (CRVW). Each CORZ share will be swapped for 0.1235 shares of CRVW. At current price, that means roughly $20 a share, but the final value will be determined when the transaction closes — sometime by year’s end. CORZ plunged the news all the way down to $13.68, but my screen tells me the stock is now back up to $15.39 (still a significant 15% loss). Other bitcoin mining firms are also in the red by 4-6%. Why the drop? It’s not necessarily a problem with the deal itself; rather, all-stock acquisitions like this one tend to present opportunities to traders interested in arbitraging the stock in the lead-up to the closing. Investment bank Jefferies believes that an acquisition at $16 to $23 per share presents fair value. It’s also worth noting that CoreWeave had already looked to purchase Core Scientific roughly a year ago for the sum of $1 billion ($5.75 per share), an offer which the miner rejected. |
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Taking a step back, the acquisition is important because it probably heralds the beginning of a massive M&A era for bitcoin miners. The high-performance computing (HPC) industry has infinite money and is hungry for new data centers; not only do bitcoin miners operate a lot of facilities, they have unique experience in setting them up. “HPC chasing electrons is the main theme for the next two to 10 years,” Taras Kulyk, CEO of bitcoin hardware firm Synteq Digital, told CoinDesk. “Bitcoin miners most certainly have targets on their backs for acquisition and consolidation in the space… As a sector, they will likely get eaten or absorbed into overall digital compute.” However, Core Scientific’s relationship to CoreWeave is quite unique. The miner entered the AI game in 2019, far ahead of the rest of the mining industry, and its business model revolves around building highly sophisticated data centers for others (read: CoreWeave). That’s not the same as firms like Hut 8 or HIVE, which dedicate some of their computational power to AI purposes, but are not contracted to erect HPC facilities. Related: Kevin O’Leary: U.S. Must Learn From Bitcoin Miners to Win ‘AI Wars’ |
Shark Tank personality Kevin O’Leary talked to CoinDesk star reporter Ian Allison about the experience that bitcoin miners can provide the HPC sector. “It all comes down to power,” he said in an interview. “Whether you’re talking about an AI data center or you’re talking about bitcoin mining. And now we are seeing that very often these projects are a bit of both.” |
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