CNBC's Kristina Partsinevelos joins 'Squawk on the Street' with the latest news on CoreWeave.

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CoreWeave has agreed to acquire CoreScientific in a $9 billion all-stock transaction, valuing CoreScientific at approximately $20.40 per share, a 66% premium. The acquisition is expected to close later in the year and will give CoreWeave control of at least 10 data centers across the United States, with a projected power capacity of 1.3 gigawatts by 2027. 

This move is seen as a strategic step for CoreWeave, which already leases significant infrastructure from CoreScientific, to vertically integrate and secure its own data center assets as demand for AI computing grows. Despite the strategic rationale, both companies' shares fell following the announcement, with some investor concerns focused on the all-stock nature of the deal and CoreWeave's ability to manage its debt and fund the acquisition.

CoreWeave doubles down on AI data center ambitions

Welcome back. One of the year's hottest IPOs just announcing a big deal in the AI space. CoreWeave says it's buying CoreScientific in an all-stock transaction. Our Cristina Parzenevalos joins us with some details. Morning, KP. Good morning, Carl. Well, CoreWeave is doubling down on its AI data center ambitions with a $9 billion all-stock deal to acquire, like you said, former crypto mining heavyweight CoreScientific. The deal values CoreScientific at about $20.40 per share, which is a hefty $66 premium and is expected to close later this year. But this move really just isn't about real estate. It's strategic. So CoreWeave already leases nearly 600 megawatts of infrastructure from CoreScientific, paying roughly about $850 million annually. That means CoreWeave is CoreScientific's largest tenant. By buying the company outright, CoreWeave gains control of at least 10 data centers across the U.S. and a projected 1.3 gigawatts of power capacity by 2027, which is crucial assets as demand for AI computes skyrockets. This is, though, classic vertical integration. Instead of being at landlords' mercy, CoreWeave now controls its own infrastructure. They're following the Amazon playbook, own it, don't rent it. It also gives the company more room and freedom to scale. Investors, though, many investors may wonder, how is CoreWeave going to fund this massive deal? Well, CoreWeave has about $1.3 billion in cash at the end of Q1, plus existing credit lines and a recent bond offering. Since it's an all-stock deal, they can issue up to 10% more shares without IPO restrictions. In other words, there are a few options out there. The market, though, right now, not taking too kindly to the deal. CoreWeave is about 3.5% lower. CoreScientific is down about 21%, now about $6 below its acquisition price. But keep in mind, just on the last month or so, CoreScientific is still up. This news kind of came out over the last two weeks, so you did see a stock pop not too long ago, guys. Yeah, but, Christina, it's still a 66% premium. Do you think the market is disappointed by the all-stock nature of the deal? Why do you think it's down 21% on the news and trading at such a discount to the deal value? I think it has to do with the all-stock aspect of it and just in terms of how does CoreWeave plan to fund it, given the high levels of debt. That is a constant concern for a lot of investors, especially bearish folks on CoreWeave. They wonder how they're going to move forward. Are they going to take on more debt, especially with so much of that debt expiring in the near term? And now they've just bought this massive company that they failed to do so last year because they didn't offer enough. Now they're offering enough, but it's an all-stock deal. So I think that has a big portion with that stock drop. Yeah, all-stock deal and the purchaser's currency also down 3%, so it's part of the story here. Christina, thank you.

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CoreWeave doubles down on AI data center ambitions

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