Welcome to Backchannel. This is the weekend briefing for subscribers of The Closer, where we decode power plays in dealmaking, business, and influence. This week is part two of our mini-series on how AI compute is the new scarce, strategic resource driving our new industrial revolution. We look at CoreWeav'es $9 billion all-stock acquisition of Core Scientific.
Last week, we explored how "compute is the new oil" through the lens of the $30 billion OpenAI–Oracle, which shows exactly how that metaphor is becoming literal, with AI firms now racing to secure gigawatts of energy, real estate, and geopolitical backing to fuel their dominance.
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The GPU Land-Grab Nobody Saw Coming
CoreWeave’s $9 billion buyout of Core Scientific turns bitcoin mines into AI factories — and rewrites the playbook for securing power in the age of generative everything.
Crypto mining rigs are out, AI supercomputers are in. A bankrupt Bitcoin miner just found a $9 billion second life as a cloud powerhouse – a deal that shows how far companies will go to secure the lifeblood of generative AI: computing power.
The deal in focus: CoreWeave’s $9 billion all-stock acquisition of Core Scientific, announced July 7. CoreWeave is a New Jersey–based cloud provider that rents out GPU-heavy servers for AI model training and inference.
Core Scientific is (or was) one of the world’s largest crypto mining operators – until falling into bankruptcy amid last year’s crypto crash. Why is an AI cloud platform buying a busted Bitcoin miner? For the infrastructure. Core Scientific brings 1.3 gigawatts of contracted power across data centers, facilities already packed with cooling and electrical gear ideal for running power-hungry AI workloads. In one swoop, CoreWeave secures a massive footprint of ready-to-go capacity to fuel the insatiable demand for AI compute.
This acquisition is the capstone of CoreWeave’s striking origin story. The company started in 2017 as “Atlantic Crypto,” a small Ethereum mining venture that rented out graphics cards to other miners. Sensing a bigger opportunity, the founders pivoted in 2019 to focus on general-purpose GPU cloud services– essentially betting that someday, someone would need a lot of on-demand computing power.
