CoreWeave Drops Core Scientific Acquisition, Purchases Marimo Python Notebook

CoreWeave, a notable player in the AI infrastructure space, has faced significant developments recently with the failed acquisition of Core Scientific. Shareholders of Core Scientific voted against an all-stock deal valued at $9 billion, which was backed by CoreWeave.

Core Scientific Acquisition Rejected

The rejection stemmed from a recommendation by the largest shareholder, Sina Toussi of Two Seas Capital. This firm specializes in post-bankruptcy companies and had advised against the merger. Core Scientific had recently emerged from bankruptcy in January 2024.

Despite its roots in cryptocurrency mining, Core Scientific shares a similar origin with CoreWeave, which has now pivoted to focus on AI workloads with support from investor Nvidia. This strategic move has considerably elevated CoreWeave’s valuation.

Market Valuation Surge

Since its initial public offering (IPO), CoreWeave’s market capitalization has skyrocketed from $14 billion to $66 billion, translating to approximately $140 per share. Investors view CoreWeave as a prime avenue for entering the AI market, and the company has been actively acquiring businesses to bolster its position.

Contractual Agreements

Prior to the acquisition attempt, CoreWeave had established a significant 12-year contract worth $10 billion with Core Scientific. This agreement allows CoreWeave to leverage Core Scientific’s facilities for AI services, underscoring the importance of their partnership.

• Acquisition Offer: $9 billion all-stock deal.
• Key Shareholder: Sina Toussi from Two Seas Capital.
• Core Scientific Bankruptcy: Emerged in January 2024.
• CoreWeave Market Cap: Increased from $14 billion to $66 billion.
• Core Scientific Market Cap: Currently $6.6 billion.

Investor Sentiment

In his opposition letter, Toussi questioned the attractiveness of the deal, which offered $16.40 per share. He suggested that Core Scientific has the potential to mirror CoreWeave’s success independently. Following the rejection of the acquisition, Core Scientific’s stock price increased, keeping investor hopes alive.

CoreWeave’s New Acquisition

In a swift response to the failed acquisition, CoreWeave acquired Marimo, a competitor in the open-source Jupyter Notebook space, for an undisclosed amount. PitchBook estimates that Marimo has raised around $5 million in funding.

Marimo’s Python notebooks are essential tools that integrate code, rich media, and explanatory text into shareable files. These tools are widely used for interactive data analysis and AI application development. This acquisition signals CoreWeave’s commitment to advancing beyond mere hosting services to actively participating in the AI application development market.

As the landscape of AI continues to evolve, CoreWeave’s strategic moves will likely shape its future in the industry.