Have you ever watched a high-stakes chess game unfold, where every move feels like it could topple an empire? That’s the kind of drama playing out right now in the corporate world, as Two Seas Capital, a major player in the investment game, takes a bold stand against the $9 billion sale of Core Scientific to CoreWeave. It’s a clash of titans—AI innovation, shareholder power, and the ghosts of a Bitcoin mining past all colliding in one blockbuster story. Let’s dive into what’s happening, why it matters, and what it could mean for the future of tech and investment.
The Battle Over Core Scientific’s Future
Core Scientific, once the king of Bitcoin mining in the U.S., has been on a wild ride. After riding the crypto wave to a public listing in 2022, it hit rough waters during a market crash, leading to bankruptcy and a bold pivot to AI compute infrastructure. Now, it’s at the center of a $9 billion all-stock deal with CoreWeave, a rising star in AI computing. But not everyone’s cheering. Two Seas Capital, holding a hefty 6.3% stake, is waving a red flag, calling the deal risky and undervalued. So, what’s got them so fired up?
From Bitcoin to AI: Core Scientific’s Big Pivot
Core Scientific’s story reads like a tech thriller. Launched as a Bitcoin mining giant, it capitalized on the crypto boom, hitting a $4.3 billion valuation when it went public in January 2022. But the crypto market’s volatility was brutal, and by late 2022, the company was navigating bankruptcy. Instead of folding, Core Scientific made a daring shift, transforming itself into a powerhouse for AI compute, the backbone of today’s artificial intelligence revolution. It’s a move that screams ambition, but also risk—especially when billions are on the line.
Core Scientific’s pivot to AI compute is a bold bet on the future of technology, but bold doesn’t always mean safe.
– Tech industry analyst
This pivot wasn’t just a change in business cards; it was a complete overhaul of strategy. The company invested heavily in high-performance computing infrastructure, positioning itself to power the AI-driven world. But with great change comes great scrutiny, and that’s where Two Seas Capital steps in.
Why Two Seas Capital Is Saying “No”
Two Seas Capital isn’t just a bystander in this saga. As Core Scientific’s largest active shareholder, they’ve got skin in the game, and they’re not afraid to play hardball. Their main beef? The $9 billion valuation for the CoreWeave deal, they argue, doesn’t reflect Core Scientific’s true worth in the booming AI compute market. They’re not wrong to question Ascendant, the deal’s structure—all stock, no cash—leaves shareholders exposed to CoreWeave’s stock swings, which could spell trouble if the market sours.
- Undervaluation concerns: Two Seas believes Core Scientific’s role in AI infrastructure is worth more than $9 billion.
- Stock volatility risk: An all-stock deal ties Core Scientific shareholders to CoreWeave’s market performance.
- Market reaction: Core Scientific’s stock plummeted 30% after the deal’s announcement, signaling investor skepticism.
I’ve seen deals like this before, and that kind of drop raises eyebrows. It’s like the market’s saying, “Hold up, this doesn’t add up.” Two Seas is betting that Core Scientific’s long-term potential in AI could outshine the short-term gains of this merger.
The Risks of an All-Stock Deal
Let’s break down the deal’s structure. An all-stock transaction means Core Scientific shareholders get CoreWeave shares instead of cash. Sounds fine, right? Not so fast. If CoreWeave’s stock takes a hit, so does the value of the deal for Core Scientific’s investors. It’s like trading a solid gold watch for a promise of gold later—great if the market’s kind, disastrous if it’s not. Two Seas is worried that this setup leaves shareholders vulnerable, especially after that 30% stock plunge post-announcement.
All-stock deals can be a gamble. You’re betting on the buyer’s future, not just your own.
– Financial strategist
Perhaps the most interesting aspect is how this reflects broader market trends. AI is hot, but it’s also volatile. Investors like Two Seas want assurance that they’re not trading a proven asset for a shiny but shaky promise.
Two Seas Capital: The Committed Investor
Two Seas isn’t some fly-by-night hedge fund. They’ve been in Core Scientific’s corner since 2022, steadily increasing their stake to 6.3%. They’re not against a CoreWeave merger outright—fun fact, they own CoreWeave shares too—but they want a deal that reflects Core Scientific’s true value. It’s like a parent who loves their kid but thinks they’re selling themselves short in a relationship. Two Seas is playing the long game, advocating for a deal that maximizes shareholder value.
Their stance is a masterclass in shareholder activism. By publicly opposing the deal, they’re rallying other investors to question the Board’s decision. It’s a power move, and it’s got the market buzzing.
What’s at Stake for the AI Compute Market?
The AI compute market is like the Wild West right now—full of opportunity but fraught with uncertainty. Core Scientific’s infrastructure is a goldmine for powering AI applications, from machine learning to data processing. If Two Seas blocks this deal, it could force a reevaluation of how companies in this space are valued. Are we underestimating the long-term potential of high-performance computing? Or is Two Seas overplaying their hand?
| Factor | Core Scientific’s Position | Market Impact |
| AI Compute Demand | Leading provider of infrastructure | High growth potential |
| Stock Deal Risks | Exposure to CoreWeave volatility | Potential value loss |
| Shareholder Sentiment | 30% stock drop post-deal | Signals market doubt |
The table above shows why this deal is a tightrope walk. Core Scientific is sitting on a valuable asset, but the market’s reaction suggests investors aren’t sold on the terms.
Could This Spark a Bigger Trend?
Two Seas’ move might be a bellwether for other shareholders in tech. As companies pivot from crypto to AI, we’re seeing more pushback when deals don’t align with long-term value. It’s like investors are waking up and saying, “Hey, we’re not just along for the ride.” This could inspire more shareholder activism in the tech sector, especially in high-growth areas like AI.
- Empowered shareholders: Investors are demanding a bigger say in mergers.
- Valuation debates: AI and tech deals are under scrutiny for fair pricing.
- Market shifts: The pivot from crypto to AI is reshaping investment strategies.
In my experience, when shareholders start flexing their muscles, it’s a sign the market’s maturing. Companies can’t just push flashy deals without justifying the numbers.
What Happens Next?
The ball’s in Two Seas’ court now. They’ve vowed to vote against the deal, but will other shareholders follow? If enough join the revolt, Core Scientific’s Board might have to sweeten the pot or scrap the deal entirely. It’s a high-stakes gamble, and the outcome could redefine how we value companies in the AI compute space.
The fight over Core Scientific’s sale is a wake-up call for boards to prioritize shareholder value.
– Investment advisor
Will Two Seas Capital’s stand spark a broader movement? Or will the deal go through, volatility and all? One thing’s for sure: this battle is a fascinating glimpse into the future of tech, investment, and power. Stay tuned—this chess game’s far from over.
Now, I’d love to hear your take. Are you Team Two Seas, or do you think the CoreWeave deal’s a fair bet? Drop your thoughts below, and let’s keep the conversation going.
