I am deeply skeptical about AI, but even more so about crypto. Lib.rs best explains it: “A thriving market for magic beans doesn’t make the magic beanstalk real.”
That is not a random website, but one related to the Rust programming language, probably the most popular one used in crypto-related companies.
Predicting the future of any tech bubble is difficult, but sometimes it isn’t necessary.
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The key is having a flexible tech stack that enables the company to pivot quickly to another market. Just think of Nvidia, which used the gaming boom to switch to the crypto boom, to quickly switch to the artificial intelligence hype train.
You can’t be sure when the bubble will burst, but you must be ready.
Nvidia isn’t the only one that pivoted from crypto to AI. Another is Atlantic Crypto Corporation. It used to mine crypto before changing its name to Coreweave and switching to a cloud computing and AI training business.
CoreWeave is heavily backed by Nvidia
CoreWeave’s (CRWV)  business model allows businesses to remotely “rent” its Nvidia GPUs for AI training. Nvidia’s reliance on CoreWeave cards is probably why Nvidia owns roughly 5% of CoreWeave.
The relationship seems to give CoreWeave certain market privileges, so it wasn’t surprising when CoreWeave announced on July 3 that it is the first AI cloud provider to deploy the latest NVIDIA GB300 NVL72 cards.
Compared to the previous generation of NVIDIA Hopper architecture, the chips offer a huge performance and power efficiency jump for AI reasoning and agentic workloads.
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Growing demand for AI training led CoreWeave to expand its deal with OpenAI in Q1, bringing the total contract value to $15.9 billion.
The company expects total revenue of $4.9 billion to $5.1 billion in 2025. However, capital expenditures could reach $23 billion.
Bank of America analysts recently downgraded CoreWeave’s stock rating, arguing there is less room for shares to head higher.
Corweave stocks sink on merger announcement
CoreWeave announced on July 7 that it will acquire Core Scientific (CORZ) in an all-stock transaction.Â
Core Scientific is another crypto mining company known for “digital mining at scale.” So, perhaps merging with a company that offers AI training and has the same roots makes sense.
The merger deal is valued at approximately $9 billion. CoreWeave argues the deal will help verticalize its data center footprint, ensuring additional revenue growth.
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Core Scientific stockholders will receive 0.1235 newly issued shares of CoreWeave stock for each share of Core Scientific stock based on a fixed exchange ratio. If the deal gets finalized, CoreWeave expects Core Scientific’s stockholders’ ownership of the combined company to be less than 10%.
CoreWeave will acquire 1.3 GW of gross power across Core Scientific’s national data center footprint, with an incremental 1 GW+ of potential gross power available for expansion.Â
Benefits of this deal include:
- Cost savings through streamlining business operations and eliminating lease overhead.
- Improved control over the power footprint and possibility for future power capacity.
- Elimination of over $10 billion of cumulative future lease overhead to be paid for existing contractual sites over the next 12 years.
- Possibility to repurpose toward high-performance computing
Because this deal is an all-stock transaction, it will dilute CoreWeave’s existing shareholders by reducing their ownership percentage. Core Scientific shareholders will also hold a much smaller percentage of the combined company.
CoreWeave and Core Scientific shares tumbled on the announcement. At last check, CRWV shares were trading 3% lower near $160, and CORZ 17% lower near $15.
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