New Jersey-based cloud-computing startup CoreWeave has reached an agreement to acquire crypto miner Core Scientific in a vertical integration move that will see the AI infrastructure provider gain access to more than 1 gigawatt of U.S. data center capacity with an incremental 1 gigawatt of power available for expansion. The all-stock transaction, valued at $9 billion, is expected to close in Q4 pending regulatory approval. According to CoreWeave, the purchase will eliminate some $10 billion in upcoming lease fees, saving around $500 million annually starting in 2027 and helping to “future-proof” the company.

“Bitcoin miners’ energy-intensive sites and power contracts, built during the crypto boom, have emerged as prime targets for AI companies expanding their computing infrastructure,” writes Reuters. CoreWeave says it may elect to divest of Core Scientific’s cryptocurrency mining business, which accounted for 89 percent of that company’s Q1 revenue, subsequent to closing.

“Of Core Scientific’s 1.3 gigawatts, 840 megawatts are allocated to CoreWeave’s contracts at five locations,” CNBC reports, noting that “CoreWeave is in the middle of an upgrade with Galaxy Digital” to convert more capacity to AI, according to CoreWeave CEO Michael Intrator.

“We have gone through the conversion process,” Intrator told CNBC, explaining that it is cheaper to convert cryptocurrency sites than it is to build new AI data centers from scratch.

“Cloud infrastructure providers are rushing to construct data centers at an unprecedented scale to meet demand from AI-related work, fueling a wave of deals and partnerships across the industry,” writes Bloomberg, which recently reported on a deal between OpenAI and Oracle for 4.5 gigawatts of data-center capacity.

CoreWeave, which calls itself an “AI hyperscaler,” has since 2017 operated data centers across the U.S. and Europe, providing “enterprises and leading AI labs with cloud solutions for accelerated computing,” according to a news announcement about the deal. The company went public in March and has since then seen its stock price grow by almost 300 percent, Bloomberg reports.

A deal summary notes Core Scientific has more than 300 U.S. employees in nine locations across seven states and $1.6 billion in assets.

“CoreWeave last year tried to acquire Core Scientific for $5.75 a share, which at the time valued the business at north of $1 billion,” writes The Wall Street Journal. “Core Scientific rejected the proposal as too low and said it was focused on its existing partnership with CoreWeave.”