EddieJayonCrypto
30 Oct 25
In a major blow to the AI data center sector, Core Scientific shareholders rejected a $9 billion all-stock merger with CoreWeave, ending a strategic deal aimed at consolidating resources. The rejection followed investor concerns over undervaluation and CoreWeave's volatile stock, causing Core Scient...
**Shareholders Reject $9 Billion Merger as Core Scientific Ends Deal with CoreWeave** In a surprising turn of events, shareholders of Core Scientific (CORZ) have rejected a proposed $9 billion all-stock merger with rival data center company CoreWeave (CRWV), effectively halting one of the most anticipated transactions in the AI data center sector. The decision marks a significant setback for both companies, which had hoped to strengthen their market positions through the deal. The merger, which was initially seen as a strategic move to consolidate resources and reduce costs, faced strong opposition from investors. Proxy advisers and at least one major CORZ shareholder advised against the transaction, citing concerns that the deal undervalued Core Scientific’s long-term potential. Additionally, investors expressed skepticism about the lack of protection against CoreWeave’s volatile stock, which has struggled with market fluctuations. The rejection came swiftly, with shareholders voting to terminate the agreement. Core Scientific formally announced the end of the merger, citing the lack of shareholder support. For CoreWeave, the collapse of the deal undermines its plan to secure additional data center capacity and save an estimated $10 billion in future leasing costs. The company now faces renewed challenges in expanding its infrastructure amid rising demand for AI computing power. Despite the merger’s failure, Core Scientific’s stock rose 4.5% following the news, reflecting investor relief that the deal was scrapped. In contrast, CoreWeave’s shares fell 5% for the session, erasing earlier gains and highlighting the market’s disappointment. The outcome underscores the cautious approach of investors in the fast-evolving AI sector, where valuations and strategic partnerships carry high stakes. As both companies navigate the fallout, the data center industry will be watching closely to see how they adapt to the shifting landscape. For now, the rejected merger serves as a reminder of the delicate balance between ambition and investor confidence in high-growth sectors.