Cryptomine and HPC hosting firm Core Scientific has rejected an acquisition offer from GPU provider CoreWeave, saying the bid “significantly undervalues” the company.

Reports surfaced this week that CoreWeave had made an offer to acquire Core Scientific for around $1 billion. The news came the same day Core Scientific announced a 200MW deal to host CoreWeave GPUs at its data centers.

Core Scientific Marble, North Carolina.jpg
Core Scientific data center site – Core Scientific

Core Scientific, Inc. has since confirmed that it received an unsolicited non-binding proposal from CoreWeave on June 3 to acquire all of the outstanding shares of the company on a fully diluted basis for $5.75 per share in cash.

However, the company is not accepting the offer.

“The board has evaluated the company’s growth prospects and near- and long-term value creation potential, including in connection with both the previously announced CoreWeave agreements and the proposal,” the company said. “The board determined that the CoreWeave proposal significantly undervalues the company and is not in the best interests of the company and its shareholders.”

Moelis & Company LLC is acting as financial advisor to Core Scientific. Sidley Austin LLP is acting as legal advisor to Core Scientific.

As well as the 200MW deal, the company said in a recent update that it is in ongoing discussions with CoreWeave and other clients to host hundreds more megawatts of capacity for HPC clients.

Adam Sullivan, Core Scientific CEO, said: “Our discussions with potential clients to modify an additional 300MW of our high-power infrastructure for HPC hosting continue, representing an even greater source of revenue by capitalizing on strong market demand.

Both CoreWeave and Core Scientific were founded in 2017 as crypto firms. CoreWeave – which counts Nvidia as an investor – pivoted to a GPU cloud offering, providing access to GPUs for AI applications.

Core Scientific, meanwhile has continued to focus on hosting cryptomining hardware for itself and others, and is increasingly starting to host AI-focused hardware.

Core Scientific said that with 1.2GW of contracted power, the company is able to deliver nearly 500MW of HPC capacity to be used for alternative compute workloads based on geographic proximity to major cities and fiber lines. The crypto-company intends to redeploy Bitcoin mining capacity from designated HPC sites to its other dedicated mining sites.

Core Scientific operates cryptomining data center campuses in Texas, North Dakota, Kentucky, Georgia, and North Carolina.

In December 2022, however, the company filed for Chapter 11 bankruptcy and its share price fell by 98 percent; falling to around $0.14 a share from a record $14.32.

The company emerged from bankruptcy at the start of this year. After trading in recent days at around $4.84, the company’s share price jumped in the wake of CoreWeave’s interest and the announced hosting deal.

At time of writing, its stock is currently trading at $7.78, giving it a market cap of $1.4 billion.