Good morning. My name is Eric, and I'll be your conference call operator today. At this time, I would like to welcome everyone to the CoreWeave Acquisition of Core Scientific conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Deborah Cordero, Vice President and Head of Investor Relations. Please go ahead.
Thank you. Good morning, and thank you for joining us on such short notice. Joining me on the call today are Mike Intrator, CEO; Brannin McBee, Chief Development Officer; Nitin Agrawal, CFO; and Nick Hoover, VP, Corporate Development. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements within the meaning of the U.S. securities laws. Forward-looking statements are based on current information and management's expectations as of this date. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release, the accompanying investor presentation, and CoreWeave's and Core Scientific's filings with the SEC.
Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. Given the timing of today's announcement, we ask that all questions remain focused specifically on the details of the announcement. The press release and an investor presentation are available on our website at investors.coreweave.com. A replay of this call will also be available on our investor relations website. I would like to turn the call over to Mike.
Thanks, Deborah, and good morning, everyone. We appreciate you taking the time to join us on today's call on such short notice. I'm excited to announce that CoreWeave has signed an agreement to acquire Core Scientific, one of the leading HPC infrastructure providers, in an all stock transaction. Under the terms of the merger agreement, Core Scientific stockholders will receive 0.1235 newly issued shares of CoreWeave Class A common stock for each share of Core Scientific common stock based on the fixed exchange ratio. This acquisition accelerates our strategy to deploy AI and HPC workloads at scale and is an important part of solidifying our growth trajectory. We expect it to deliver significant efficiencies and optimization benefits to CoreWeave. During our IPO process earlier this year, we laid out a goal of increasing ownership of critical elements of the AI cloud platform, driving operational efficiency and lowering our cost of capital.
This acquisition is an integral part of the execution of that strategy. Owning Core Scientific's high-performance data center infrastructure enables us to significantly enhance operating efficiencies and de-risk our future expansion. By controlling the foundational layer of our AI cloud platform, we will enhance the scale, performance, and expertise we provide and our customers' need to unleash the full potential of artificial intelligence. I'll share some further details on the acquisition and our rationale. First, I'd like to thank Adam Sullivan and the entire Core Scientific team. We believe that the benefits of this proposed acquisition will accrue to the combined shareholders, and together, we will better serve the business needs and goals of our current and future customers. Accelerating the AI infrastructure deployment at scale. Let me review what it means for our platform scale and delivery.
We are acquiring one of the largest high-performance compute platforms in the U.S. Core Scientific has a total of 1.3 GW of existing gross power capacity. Of that, approximately 840 MW are tied to CoreWeave's active HPC contracts across five sites. The remaining 500 MW are allocated across three cryptocurrency mining data centers, which we have the option to either convert into HPC or divest. We now also have access to more than 1 GW of expansion capacity. All in, this acquisition gives us control of more than 2 GW of gross power across nine distinct sites, significantly strengthening our position as the AI hyperscale. This acquisition is more than just added capacity. It is a strategic step forward verticalizing our data center footprint, helping us future-proof revenue growth and enhancing core profitability. There are four key expected strategic benefits of this acquisition. First, operational efficiency.
We expect to drive significant cost savings by streamlining core business operations, eliminating third-party lease obligations, and unlocking greater control over fixed infrastructure costs. Second, greater financial flexibility. Our direct ownership of the data center footprint will unlock infrastructure-specific financing strategies to support capital expenditure we have already committed to via existing contracts with Core Scientific, ultimately reducing our cost of capital and improving our balance sheet efficiency. Power ownership and optionality. We will gain greater control over a critical and scarce power footprint, along with the optionality to repurpose the existing capacity to meet our clients' evolving needs. Finally, expanding our expertise. This acquisition brings on more than 300 employees with unique expertise in power procurement, construction, and site management. This isn't just about expanding capacity.
It's about strengthening our end-to-end AI technology stack by bringing us further down the infrastructure layer where control, efficiency, and execution matters most. By utilizing deep infrastructure engineering expertise of Core Scientific with CoreWeave's cutting-edge AI HPC operations and software, we are uniquely positioned to tackle the next generation of architectural challenges of AI data centers. This powerful combination of talent allows us to innovate at the base layer, optimizing performance, efficiency, scalability, and economics. This acquisition gives us direct control over the design, architecture, and execution of our builds, enabling faster, tailored deployments for high-density AI workloads at scale. All this while improving cost efficiency and visibility into delivery timelines. Now, I'd like to turn it over to Nitin, who will talk more about what we expect to see in terms of impact on our financials. Nitin.
Thank you, Mike. I want to start by briefly reviewing the details of the transaction and some of the key financial impacts we expect to see. As Mike mentioned, this is an all-stock transaction. Upon closing and under the terms of the agreement, which has been approved by the board of directors of each company, Core Scientific shareholders will receive a fixed exchange ratio of 0.1235 shares of CoreWeave common stock for each share of Core Scientific common stock held. As of July 3rd, 2025, the agreed-upon exchange ratio implies a total equity value of $9 billion. This figure is calculated on a fully diluted basis and reflects CoreWeave's five-day volume-weighted average price. The final equity value will be determined at the time of closing.
The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including regulatory approvals and approval by Core Scientific's stockholders. Following the close, Core Scientific shareholders are expected to own less than 10% of the combined company. Now, let's talk about financial impact and synergies potential. As a result of eliminating third-party lease obligations, operational efficiencies, and greater financing flexibility, this transaction is expected to deliver meaningful financial benefits once fully integrated. First, we'll see the immediate elimination of more than $10 billion in future lease liability overhead, costs that were otherwise committed across existing contractual sites over the next 12 years. Including the elimination of lease overhead and a more streamlined and efficient operational model, we anticipate $500 million in fully ramped annual run rate cost savings by the end of 2027.
Second, the deal is expected to be leverage neutral to CoreWeave while enhancing access to a broader set of infrastructure financing sources at lower cost of capital. Third, the portfolio includes crypto mining assets, which present medium-term optionality to repurpose or divest in alignment with a long-term strategy. Beyond the near-term cost synergies, this transaction also delivers significant capacity upside optionality and unlocks more efficient financing pathways, both of which are central to a long-term infrastructure and capital strategy. Let's break that down into the two core components. First, the one GW of potential gross power expansion. It includes 700 MW plus of incremental power available across existing CoreWeave sites supporting rapid, scalable AI infrastructure deployment, and an incremental 100 MW capacity at non-CoreWeave site, adding further geographic and deployment flexibility.
It also includes 350 MW of additional digital asset mining capacity that can be converted for HPC use or potentially divested, creating flexibility in how we allocate power. Second, nearly $5 billion in committed CapEx is now unlocked for more efficient financing. This transaction is a leverage neutral acquisition with no material incremental CapEx required. By owning the underlying infrastructure, we can attract new and diverse sources of capital, including infrastructure-oriented vehicles that can replace traditional debt or equity financing. As a result, we expect to drive down our cost of capital significantly, unlocking financing structures only made possible through direct asset ownership. As Mike said at the top, this is an exciting day for CoreWeave, and I also want to welcome our new Core Scientific colleagues and look forward to partnering in the closing process and integration as we move forward a larger, stronger, and a more capable company.
Operator, we'd like to now open up for questions.
At this time, I would like to remind everybody, in order to ask a question, please press star, followed by the number one on your telephone keypad. We ask that all participants limit themselves to one question. Thank you. Your first question comes from the line of Keith Weiss with Morgan Stanley. Please go ahead.
Excellent. Thank you, guys, for taking the questions and congratulations on the proposed transaction. Really exciting expansion of the CoreWeave story. I was hoping to dig in a little bit more on the expanded sort of power available to you guys, both in terms of the current facilities that are being used by Bitcoin miners. What's the time frame that we could expect that maybe that could get shifted over to high-performance computing? And the additional GW of power, can you talk to us a little bit more about that? Is that commitment that Core Scientific already had with utilities, or what's the nature of that additional sort of GW on top of that?
Yeah. Thank you for the question, and thanks for joining the call. I'd like to kind of talk through this a couple of different ways. The way that the portfolio of assets work, we can step in and begin the process of repurposing specific pieces of the infrastructure almost immediately upon the close of this. We'll have a more robust kind of timeline of what that schedule will look like. As you go across the portfolio, some of the assets are easier and can be converted more quickly. Some of them will take a little bit longer. With regards to the power, the way that the power works is there are components of the power that are currently under contract, under PPAs.
There are also components of the power portfolio that they have, and ultimately, we will have the ability to kind of scale the facility and thereby bringing on more power into the infrastructure. We are really excited. We think that it really fits hand in glove with our expansion strategy. It fits hand in glove with our continued scale.
Your next question comes from the line of Brad Zelnick with Deutsche Bank. Please go ahead.
Great. Thanks so much, and congratulations on the deal. Mike and Nitin, you talked about this deal opening up new financing strategies and reducing your overall cost of capital, which is obviously very important. Can you expand further on this and maybe dimensionalize the impact that you're expecting this to have on your cost of capital? Thank you.
Yeah. Maybe I'll start with that, and then Nitin can hop in as we go here. By consolidating Core Scientific under our umbrella as a single company, you've located the data centers as well as the financing obligations in a single company, which will allow us to more efficiently go out to the market and finance the data centers in a much more standard configuration than how we've been financing them on a go-forward basis. We haven't gone out there to do the financing, but what we have seen from other infrastructure in terms of the step function of offers where we can finance the obligations that we currently have versus what we've been able to do at other facilities, it's several hundred basis points spread in the cost of capital. We're pretty excited about it.
We think it is a pretty material step function in the efficiency of our balance sheet. Nitin, anything to add on that?
No. Mike, that was well answered. Over to the next question.
Thank you. Your next question comes from the line of Brent Thill with Jefferies. Please go ahead.
Thanks, Michael. Just in terms of the proprietary nature of what you're getting here, what's different and unique versus their competitors? How would you differentiate the underlying components of that foundation versus what you saw from others?
Yeah. There are a few aspects of it. There is timing. What data center infrastructure can we bring on when, and how does that fit into our scaling? The scale of it is obviously extremely material and allows us to kind of continue the pace of building and scaling our solutions for the largest, most demanding consumers of the infrastructure. There is an ongoing component of the existing insourcing of these contracts, which allow us to have impact on our margins at CoreWeave in a very, very kind of effective and streamlined fashion. We have a very long partnership. We have been working with Core Scientific really since the very beginning of our company being founded. It is very exciting to work with these guys. We know them very well. They know us very well.
We think it's a wonderful opportunity to be able to extend our offering in terms of the up-the-stack and down-the-stack approach. Earlier this year, you saw us go in and acquire Weights & Biases, and you've watched us go through the integration process. It's been a wonderful process working with them as we bring the two companies closer and closer together. That was an up-the-stack solution for us. Core Scientific, being long-standing partners with us, this is a down-the-stack opportunity for us. Like I said, it's really just a great partner for us to kind of continue to build and expand our footprint.
Your next question comes from the line of Tyler Radke with Citi. Please go ahead.
Yeah. Good morning, and congratulations on the deal. I wanted to just ask a little bit more about the timing aspect here. I mean, obviously, to your point, you've been partnering with Core Scientific for some time, but why now? I'm just curious, given some of the large contracts we've seen in the AI infrastructure space over the last couple of weeks, how do you kind of think about this helping you perhaps unlock bigger deals, particularly with a larger power commitment now on your books?
Yeah. Look, we think it's really important to present to the market options for building massive-scale solutions to the most complicated compute requirements that they have. When you're referencing some of the large deals, we did a very large deal. There have been some other very large deals that have been announced. There is a clear indication in the market that the size and scale of the infrastructure requirements that are going to be necessary to be a material and significant player, which CoreWeave has been over the past three years, in the drive to deliver the required infrastructure to the market. You just need to be able to control infrastructure at this scale. You need to be able to finance infrastructure at this scale.
It seemed like an opportune moment for us to continue to extend our partnership with the Core Scientific team, to extend our partnership with our clients, to be able to offer those type of deals at that type of scale.
Your next question comes from the line of John Cordero with Needham & Company. Please go ahead.
Hey, thanks for taking my question and congrats on this. On the 500 or so MW of additional capacity that's the Bitcoin mining that you could convert over, would you expect that to be at that $5 million-$8 million per MW in CapEx retrofit that you're doing with the current capacity, or would you expect that to be a bit higher? I know peers are looking at $11 million-$13 million per MW for builds. Any color on that CapEx?
Yeah. Look, what I would say is that it's going to be less expensive than greenfield operations, but it may be marginally more expensive than what we've done historically. I think that we have proven with Core Scientific our ability to build this infrastructure in a very cost-effective way. I expect that portions of that portfolio of 500 MW will fit very, very cleanly into an efficient build capital ratio. When you get further out on the margin, there may be some of those MW that are just more difficult to transition over. Those we look at as just having optionality. To the extent that it does not make sense because it's too expensive or it's in the wrong place, we will disgorge ourselves of that asset and move on.
Your next question comes from the line of Brad Fils with Bank of America. Please go ahead.
Oh, wonderful. Thank you so much. Congratulations on the deal. I did want to ask about one of the components you talked about, Mike, here, and the strategic rationale was your ability to repurpose the assets. How are you thinking about that balance between crypto and AI infrastructure? Will there be some crypto workloads that you'll still maintain here? What does it take to repurpose these assets? What does that effort look like? Thank you.
Yeah. Look, we've got a lot of experience now repurposing these assets. We've gone through it at several facilities with Core Scientific. The teams have tremendous experience working together. I think a lot of the questions are probing around the physical infrastructure. I think it's really important to understand that our lens on the physical infrastructure is that it provides us with tremendous optionality to be able to provide massive computing infrastructure for our clients. Depending upon what our clients want, when they want it, how they want to expand their footprint, we have an asset that will allow us the flexibility to do that. Let me also be very clear. We're not looking to expand our footprint into cryptocurrencies, right? That's not what the objective of this acquisition was.
The objective of this acquisition was to get access to the infrastructure that we require to be able to build and solve for the part of the market that we are addressing.
Final question comes from the line of Ruben Roy with Stifel. Please go ahead.
Yeah. Thank you for letting me ask a question, Mike or Nitin. Just a quick one on expense structure. It doesn't seem like your expense structure, when I think about SG&A or R&D, would change much on this. Maybe a little premature to be thinking about that. Any detail or color on how to think about the model once you close the acquisition from an expense perspective?
Go ahead, Nitin.
Sure. In terms of the expenses, the first and immediate impact is going to be the elimination of the lease expenses that we had with Core Scientific for the contracted sites. In addition to that, we will have some expenses in terms of operating these sites. As we mentioned, we will be generating operational efficiency through a joint combined model with the company. We do expect the combined impact of this to be about $500 million of cost savings on an annual run rate basis by the end of 2027. Expect those savings to kind of trickle through our portfolio over a period of time. We will give more guidance as we talk about the integration of the two companies at close.
I'll now turn the call back over to CEO Mike Intrator for closing remarks. Please go ahead.
Yeah. Once again, thank you, everybody, for joining the call. We couldn't be more excited about moving forward with this acquisition. We think it's a really important and material step forward in our strategy to provide the state-of-the-art, most efficient, and effective solutions. We're really excited about doing that with Core Scientific over the next several years. Thank you.
Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.