Speaker 1: Bloomberg Audio Studios, podcasts, radio news, The Stock Movers podcast,
Speaker 1: your roundup of companies making moves in the stock market
Speaker 1: harnessing the power of Bloomberg Data.
Speaker 2: Let's take a look at some of the stocks on
Speaker 2: the move today. I'm Paul Sweeney alongside Lisa Matteo.
Speaker 3: I want to take us to honorad Rona. He is
Speaker 3: Bloomberg Intelligence technology analyst Core Weed buying Core Scientific. It's
Speaker 3: an all stock transaction, anurag. I want to bring you
Speaker 3: in and talk about this. For core Weed, what is
Speaker 3: the benefit from this, What do they gain from this?
Speaker 4: And think about it that they have capacity to process
Speaker 4: ex summer of transactions, all the backlock that they have
Speaker 4: with this particular deal, they are expanding their infrastructure. I
Speaker 4: mean it's a very simple deal as if you know,
Speaker 4: they're just buying more factories to produce what they do.
Speaker 4: So it's as simple as that.
Speaker 2: Tell us what Core we've is, what do they do
Speaker 2: and why are they shouting out nine billion dollars to
Speaker 2: get bigger?
Speaker 4: I guess so in the rest of pure reforms, they
Speaker 4: are just renting computing resources to anybody that wants to
Speaker 4: run an AI infrastructure. They are a very big Nvidia shop.
Speaker 4: They basically buy GPUs from Nvidia, they create a network
Speaker 4: or an infrastructure, and they give it to people to
Speaker 4: go out and experiment or do whatever they need to
Speaker 4: do on that infrastructure. It's no different than what AWS does,
Speaker 4: but very heavy focus on GPUs rather than the CPO.
Speaker 4: So that's really the big difference between a pure play
Speaker 4: provider like Corevive versus Amazon Web Services.
Speaker 3: Now, if you can dig into some of the background,
Speaker 3: what kind of challenges has Core We've had in the past.
Speaker 3: I mean, didn't they have a pretty dismal IPO.
Speaker 4: Yeah, I think that's really the most important thing is,
Speaker 4: you know, they everybody thought when they're going to come
Speaker 4: out as the first pure play you know AI infrastructure IPO,
Speaker 4: it's going to be extremely popular, but it didn't happen.
Speaker 4: And the reason for that is because they need a
Speaker 4: large amount of upfront capital to build these data centers
Speaker 4: and then the workload comes in over the next several years.
Speaker 4: There's a lot of questions about whether there's going to
Speaker 4: be sustainability of this GPU demand going forward several years out.
Speaker 4: So that's why you were right. The IPU came at
Speaker 4: forty in a few days it was down to thirty five.
Speaker 4: But now we're seeing you know, the stock croser who
Speaker 4: won sixty before this deal was announced, so I you know,
Speaker 4: we have talked about it before that. You know, why
Speaker 4: aren't they doing a secondary when it's like one hundred
Speaker 4: and sixty bucks stock of What they did instead is
Speaker 4: they use their stock to go out and buy another
Speaker 4: competitor I shouldn't say competitor, but you know, another company
Speaker 4: in that space, so that it expands their capacity. And
Speaker 4: you know, I think they're doing the right thing by
Speaker 4: using stock at this point.
Speaker 5: Are there more core weaves out there on a run
Speaker 5: kind of more pure play AI stories, maybe the kind
Speaker 5: of the sausage of AI, if you will, the guts
Speaker 5: that somebody could take public.
Speaker 4: There are multiples of them there, but they are much
Speaker 4: smaller size in korby the I would say there would
Speaker 4: be hundreds of them at this point, because you know,
Speaker 4: you go out, you buy the GPU, you go out
Speaker 4: and start renting it out in the in you know,
Speaker 4: in a long time ago, this high powered computing was
Speaker 4: used for bitcoin mining, and then you know, and that's
Speaker 4: not in favor. These guys are renting out their infrastructure
Speaker 4: for other reasons. So there are other plays out there,
Speaker 4: but almost all of them are much smaller than core
Speaker 4: Viv from a you know, pure play point of view.
Speaker 3: Now we digged into Corewey, what about Core Scientific, what's
Speaker 3: the attraction to them?
Speaker 4: I mean, it's just they're expanding the number of you know,
Speaker 4: the capacity that they have to process the transactions in
Speaker 4: a sense that coreviev has a massive backlog right now.
Speaker 4: They have people wanting to use their services, and then
Speaker 4: these guys have to go out and lease it from
Speaker 4: you know, other companies like Core Scientific. In this case,
Speaker 4: they said, you know, they have an agreement with them
Speaker 4: to lease their facilities. They just said, you know, we'll
Speaker 4: buy it out and expand their size. And I think
Speaker 4: that's as simple as that.
Speaker 2: And I think I have to point out Lisa core
Speaker 2: Weave based in Livingston, New New Jersey. Yeah, so folks,
Speaker 2: a little history lesson. Before there was Silicon Valley, there
Speaker 2: was New Jersey, there was Central Jersey, the Institute for
Speaker 2: Advanced Study, Princeton University, Menlo Park, New Jersey. Before there's
Speaker 2: a Menlo Park, California, Menlo before there's a sand Hill
Speaker 2: Road in Silicon Valley, there's a Sandhill Road in Jersey.
Speaker 2: There's all these Jersey guys went on New Jersey's office.
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