In June 2024, Core Scientific and CoreWeave announced a transformative 200 MW hosting agreement that has significantly impacted the Bitcoin mining and AI industries. This agreement is part of a larger 12-year contract valued at approximately $3.5 billion. CoreWeave has been working with Core Scientific to expand its high-performance computing (HPC) capabilities, illustrating a shift in the industry towards integrating artificial intelligence (AI) with traditional Bitcoin mining operations​.

The contract between Core Scientific and CoreWeave highlights the evolving landscape of Bitcoin mining. These “megasites,” previously focused solely on cryptocurrency, are now valued for their potential in AI and HPC services. The integration of AI into mining sites allows these facilities to diversify their revenue streams, tapping into the growing demand for AI computational power​.

JPM: "Over the past two weeks, bitcoin miners have received an influx of investor interest in response to the announcement that Core Scientific will host 200 MW of GPUs for CoreWeave, an AI hyperscaler. The aggregate market cap of the 14 miners we follow has increased 22% ($4bn)… pic.twitter.com/L31kC1FZlq

— matthew sigel, recovering CFA (@matthew_sigel) June 24, 2024

Core Scientific’s shares surged as much as 40% in pre-market trading following the announcement of a major deal with cloud computing firm CoreWeave. The two companies signed a transformative 200 megawatts (MW) hosting agreement, marking Core Scientific’s strategic expansion into artificial intelligence (AI) hosting services​.​

Miners started venturing into AI/HPC in 2023, but the CoreWeave and Core Scientific 200 MW hosting deal in June 2024 took the industry by surprise.

Prior to the AI boom, the sites owned by miners were valued purely for their mining potential. However, the impact of the CoreWeave… pic.twitter.com/FgCe6TUvKT

— Zack (@ZackPokorny_) August 2, 2024

The deal between Core Scientific and CoreWeave has been valued at approximately $3.5 billion over its 12-year term. This agreement highlights a shift in the industry as Bitcoin mining facilities, known as “megasites,” begin to leverage their infrastructure for AI and high-performance computing (HPC) services. This move not only diversifies revenue streams but also positions Core Scientific to capitalize on the growing demand for AI capabilities.

Adding to the excitement, CoreWeave has reportedly made an all-cash offer to acquire Core Scientific, implying a 55% premium to the miners’ three-month average weighted share price as of May 31. This offer was made on Monday, as reported by Bloomberg, citing a source familiar with the matter. If accepted, this acquisition could significantly alter the landscape of the Bitcoin mining industry by integrating advanced AI technologies with traditional mining operation

Core Scientific’s strategic move to incorporate AI into its operations reflects a broader trend among miners to explore high-performance computing opportunities. As AI continues to revolutionize various industries, the collaboration between Core Scientific and CoreWeave serves as a benchmark for future partnerships in the sector.

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