Two Seas Capital vows to block $9bn Core Scientific sale to AI firm CoreWeave

Core Scientific Inc. (NASDAQ: CORZ) is facing a major test of shareholder sentiment after its largest investor, Two Seas Capital, declared it will vote against the crypto miner’s proposed $9 billion all-stock sale to artificial intelligence infrastructure provider CoreWeave Inc. The opposition, made public in an investor letter, signals a potential battle ahead for the Texas-based data-center operator, which only last year emerged from Chapter 11 bankruptcy and has been pivoting from cryptocurrency mining toward AI-driven compute services.

Two Seas Capital, which holds about 6.3 percent of Core Scientific’s outstanding shares, argued that the merger undervalues the company’s assets and future earnings potential while exposing investors to unnecessary strategic and financial risks. The firm contended that the transaction, as structured, primarily benefits CoreWeave — which is backed by Nvidia Corporation and other investors — by granting it access to Core Scientific’s high-capacity energy footprint and strategically located data-center network.

Why are Core Scientific’s largest shareholders challenging the proposed CoreWeave merger?

According to the letter, Two Seas Capital believes that Core Scientific’s data-center infrastructure, with its gigawatt-scale energy capacity, has become increasingly valuable in the AI era. The investor asserted that the current offer does not adequately capture the premium such assets command, especially as demand for GPU-accelerated compute surges. It also criticized the prospect of Core Scientific shareholders becoming minority owners in the combined entity, raising concerns about dilution and loss of strategic control.

The shareholder’s challenge comes after Core Scientific shares dropped roughly 17 percent on the day the merger was announced, a market reaction that some investors interpret as skepticism over the deal’s valuation and fit. Two Seas claimed that other potential acquirers have expressed interest in the business and urged the board to explore alternative transactions that could deliver higher value.

How does the CoreWeave deal fit into Core Scientific’s shift from crypto mining to AI infrastructure?

The proposed sale follows a year in which Core Scientific, long known as one of the largest publicly traded Bitcoin miners in North America, began to reposition itself as a provider of AI-ready infrastructure. The pivot reflects broader trends in the digital infrastructure sector, where data-center operators are chasing high-margin workloads tied to artificial intelligence, cloud computing, and machine learning.

CoreWeave’s interest centers on Core Scientific’s large-scale facilities, which are powered by long-term energy contracts and positioned near major transmission lines. By integrating these sites into its own cloud compute network, CoreWeave aims to rapidly scale capacity for AI model training and inference workloads, an area where GPU availability has been a bottleneck industry-wide.

What are analysts and institutional investors saying about the valuation and strategic risks?

Analysts following the sector note that the deal encapsulates a common M&A tension: balancing short-term shareholder returns against the longer-term strategic upside of staying independent. While the $9 billion stock-for-stock structure represents a sizable headline value, skeptics point out that the lack of a substantial cash component leaves shareholders exposed to the volatility of the combined company’s shares.

Institutional investors are reportedly split. Some see the tie-up as a route to diversification beyond the volatile crypto mining market, giving Core Scientific exposure to the booming AI compute sector. Others argue that the company’s improving balance sheet, reduced debt load post-bankruptcy, and rising demand for high-density data-center space make a case for holding out for a richer bid.

Could Two Seas Capital rally enough votes to block the deal?

The merger requires approval from a majority of Core Scientific shareholders. With Two Seas holding just over six percent, its success in blocking the transaction depends on convincing other major investors to align with its position. The firm’s public stance increases the likelihood of a contested vote, which could either lead to renegotiated terms or force the board to abandon the deal entirely.

Core Scientific has defended the merger, saying it would create one of the largest GPU-accelerated compute providers in the market, leveraging CoreWeave’s AI cloud services expertise and its own energy infrastructure. Management has emphasized the potential for recurring, high-margin AI workloads to stabilize revenue streams historically tied to volatile Bitcoin prices.

What is the outlook for Core Scientific if the merger fails?

If the deal collapses, Core Scientific could continue its dual-track strategy of operating both crypto mining and AI infrastructure services. Industry observers suggest that with power-hungry AI models increasingly deployed at scale, data-center operators with large energy footprints could command higher valuations in the near future.

Two Seas Capital’s statement that “other potential buyers” have approached the company could prompt a competitive bidding process. Alternatively, Core Scientific might choose to grow organically, capitalizing on its existing client base in crypto while expanding into AI hosting through targeted capital investments.

How does this standoff reflect broader trends in digital infrastructure and AI compute markets?

The clash between Two Seas Capital and Core Scientific’s board underscores a key strategic debate across the digital infrastructure sector: whether to cash out in a consolidating market or double down on independent growth in a rapidly expanding AI economy. As hyperscalers, AI startups, and private-equity-backed operators scramble to secure GPU-ready facilities, owners of large-capacity data centers are finding themselves in a seller’s market.

For Core Scientific, the decision will ultimately hinge on a complex valuation equation: whether the immediate premium on offer from CoreWeave justifies giving up control, or if the company can unlock greater shareholder value by continuing to ride the AI infrastructure wave as an independent operator. This decision is not purely financial — it is also deeply strategic. The merger would give Core Scientific access to CoreWeave’s established AI customer base, its partnerships in high-performance computing, and its ability to deploy Nvidia-powered GPU clusters at scale. In theory, that could accelerate the company’s transition away from cyclical cryptocurrency mining revenues toward steadier, contract-driven AI workloads.

Yet, remaining independent would allow Core Scientific to retain full control over its capital allocation, client mix, and growth roadmap. The demand for high-density, energy-rich data-center capacity is projected to grow sharply as AI adoption spreads across industries from autonomous vehicles to healthcare analytics. Shareholder sentiment, however, remains divided, with some prioritizing a short-term liquidity event and others advocating for a longer-term growth play. The outcome will depend on how convincingly the board can demonstrate that its chosen path — merger or independence — aligns with both current market dynamics and the long-term economics of the AI infrastructure sector.