What does Core AI Holdings do?
Core AI Holdings, Inc. is a British Columbia corporation whose common shares trade on the Nasdaq Capital Market under CHAI. The current public company was created through an October 2025 reverse-merger transaction in which Core Gaming became the accounting acquirer and operating center of the group. Its wholly owned chain is Core AI Holdings, Core Gaming Inc. in Delaware, and Newbyera Technology Limited in Hong Kong. The company describes itself as an AI technology and infrastructure platform, but its reported operating revenue still comes from a much narrower activity: publishing and monetizing casual mobile games through advertising.
The distinction between operations and strategy is essential. Core Gaming develops, co-develops, and publishes games, then monetizes them through measurable advertising activity. Data-center joint ventures and HomeGPT are expansion initiatives rather than established revenue segments. CHAI is therefore best understood as a small mobile-advertising operator attempting a capital-intensive diversification.
| Research item | Current answer | Why it matters |
|---|---|---|
| Listing | Nasdaq Capital Market, CHAI | A small foreign private issuer with Form 20-F and Form 6-K reporting rather than the domestic 10-K/10-Q cadence. |
| Operating core | Core Gaming and Newbyera | These subsidiaries produce the advertising revenue and operating data visible in the financial statements. |
| Primary geography | Global app audience; operating base in Hong Kong | Platform rules, foreign exchange, cross-border contracts, and collection risk affect the economics. |
| Strategic expansion | AI/HPC data-center joint ventures and HomeGPT | These projects could diversify the model, but they had not yet produced disclosed operating revenue in the latest financial statements. |
The clearest official description is in the company’s 2025 Form 20-F, while the Nasdaq listing page confirms the current ticker and market.
How does Core AI Holdings make money?
The operating model is an advertising funnel
In fiscal 2025 and Q1 2026, continuing-operations revenue consisted entirely of advertisement publishing fees. Core AI places ads from platforms such as AppLovin and Google inside its games, while paying to acquire users and compensate technology or content partners. Revenue can therefore grow without creating gross profit when promotion and partner costs absorb the monetization.
Why revenue quality matters more than headline growth
Core AI reported $55.24M of fiscal 2025 revenue, but cost of providing services was $55.54M, producing a negative gross profit. The first quarter of 2026 exposed the same structural tension more sharply: management reduced the advertising budget and suspended loss-making placements as customer-acquisition costs rose, so revenue fell while costs remained above revenue. The key question is whether acquired users generate enough lifetime monetization to exceed promotion, technology, and partner-sharing costs.
What did the latest quarter reveal?
The latest disclosed period is the quarter ended March 31, 2026. Revenue contracted after management cut negative-ROI advertising placements, but costs did not fall fast enough, producing a deeply negative gross margin.
| Metric | Q1 2026 | Q1 2025 | Interpretation |
|---|---|---|---|
| Revenue | $3.77M | $14.51M | A 74.0% decline after management reduced ad spend and stopped negative-ROI placements. |
| Cost of services | $6.84M | $14.74M | Costs fell 53.6%, slower than revenue. |
| Gross profit | -$3.07M | -$0.23M | Computed gross margin was approximately -81.5% in Q1 2026. |
| Operating loss | -$3.62M | -$0.09M | The contraction flowed through almost entirely to operating results. |
| Net loss | -$3.63M | -$0.10M | Basic loss per share was $0.18 for Q1 2026. |
| Operating cash flow | +$0.07M | +$0.21M | Positive cash flow came mainly from collecting receivables and reducing prepayments, not from accounting profit. |
The Q1 2026 financial statements provide the figures, while the accompanying management discussion and analysis explains the advertising pullback and higher customer-acquisition costs.
Why did Core AI shift from legacy communications to gaming and AI infrastructure?
The reverse merger changed the economic center of the company
The listed entity was formerly Siyata Mobile. Core Gaming acquired Newbyera and completed a reverse merger with the public company in October 2025, becoming the accounting acquirer. Core AI then divested the legacy Siyata business for $100,000 upfront plus annual 2026-2028 earn-outs equal to the greater of $200,000 or 2% of gross revenue.
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May-June 2024Core Gaming was formed and acquired Newbyera, establishing the mobile-game publishing and advertising operation that now drives reported revenue.
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February 2025The parties announced the merger framework, creating a path for Core Gaming to become part of a Nasdaq-listed company.
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October 2-7, 2025The company changed its name, closed the reverse merger, adopted CHAI, and completed a one-for-four share consolidation.
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December 31, 2025Core AI divested the legacy Siyata operating assets, concentrating the public-company story on gaming and AI initiatives.
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Q1 2026The company entered three data-center joint ventures and one memorandum of understanding, but disclosed that no project had yet been approved and no financing commitment had been secured.
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June 2026Core AI launched HomeGPT and raised approximately $5.4M gross through common shares and pre-funded warrants.
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July 2026Arie Goor became CFO, and the company further positioned HomeGPT as an AI-powered residential decision layer.
The strategic tension is ambition versus financing capacity
Management wants to move beyond low-margin advertising, but data centers require sites, power, customers, construction expertise, and substantial capital. The annual filing said the ventures lacked approved projects and committed financing. Gaming should remain the base case; data centers and HomeGPT are option value until commercial and financing milestones appear.
The transaction chronology is documented in the October 2025 merger filing.
What gives Core AI a competitive advantage?
Core AI does have operating resources that matter. Its filing describes more than 40M active users per month, over 870M cumulative app downloads, and reach across more than 140 countries. A broad portfolio gives the company more surfaces on which to test advertisements, compare user-acquisition channels, and apply business-intelligence tools. Publishing expertise can also attract developers that lack their own monetization and promotion capabilities.
Why the moat is still developing
These assets are not yet a proven moat. Casual-game users switch easily, distribution depends on major platforms, and Q1 2026 showed that acquisition prices can overwhelm monetization. Net intangible assets were only $277 at March 31, 2026. The defensible resource is operational learning in title selection, ad optimization, and publisher relationships—not patents or recurring subscriptions.
Who are Core AI’s main competitors and platform gatekeepers?
Core AI competes with mobile developers and publishers for users, studios, and advertising inventory. Apple, Google, Meta, AppLovin, and other platforms also control distribution, tracking, and monetization. Some ecosystem partners are simultaneously customers, gatekeepers, and competitors, giving them substantial bargaining power.
| Competitive force | Examples | Pressure on Core AI |
|---|---|---|
| Game developers and publishers | Independent studios, scaled mobile publishers, Unity-related ecosystems | Compete for hit titles, developers, promotion inventory, and player attention. |
| Distribution platforms | Apple App Store and Google Play | Policy changes can affect visibility, privacy identifiers, app approval, and monetization. |
| Advertising platforms | Google, AppLovin, Meta | Control demand, measurement, pricing, account supervision, and access to traffic. |
| Consumer-attention rivals | Meta, Snap, Microsoft, other apps and games | Raise acquisition costs and reduce the time users spend in Core AI’s titles. |
| Data-center developers | Established hyperscale and colocation operators | Possess deeper capital, power procurement, construction, and customer relationships. |
How financially strong is Core AI Holdings?
Annual growth did not translate into gross profit
Fiscal 2025 revenue rose 58.6% to $55.24M from $34.83M in fiscal 2024, but cost of providing services increased 66.6% to $55.54M. Gross profit moved from positive $1.49M in 2024 to negative $0.30M in 2025. General and administrative expense reached $6.57M, including a $5.60M warrant expense, and the fiscal 2025 net loss was $7.19M.
| Annual metric | FY2025 | FY2024 | Analytical signal |
|---|---|---|---|
| Revenue | $55.24M | $34.83M | Strong reported growth, partly reflecting a fuller operating year for Core Gaming. |
| Gross profit | -$0.30M | $1.49M | FY2025 gross margin was approximately -0.5%, versus about 4.3% in FY2024. |
| Operating loss | -$7.12M | -$0.37M | Warrant expense and weak gross economics materially widened the loss. |
| Net loss | -$7.19M | -$0.37M | The model did not generate earnings despite higher revenue. |
| Operating cash flow | -$3.64M | -$0.05M | External capital remained necessary to fund operations and strategic expansion. |
Liquidity is the binding constraint
The computed current ratio was about 0.87x, and current liabilities exceeded current assets by roughly $1.09M. Accounts receivable fell from $5.69M at December 31, 2025 to $1.39M at March 31, 2026, which helped produce modest positive operating cash flow. However, the filings contain a going-concern warning and state that existing resources may not fund operations and data-center opportunities for the next twelve months. A June 2026 registered direct offering raised approximately $5.4M gross, but it also issued up to 1.97M common shares and pre-funded warrants for up to 3.98M additional shares.
The financing terms are described in the June 2026 offering filing.
Which KPIs best explain Core AI’s performance?
Traditional revenue growth is insufficient for this model. Researchers need operating metrics that connect user acquisition to advertising monetization, then connect those unit economics to cash requirements. Core AI discloses audience scale but does not yet provide a full cohort dashboard such as retention, payer conversion, revenue per user, or customer-acquisition payback. The absence of those metrics increases uncertainty because Q1 2026 showed that management can reduce revenue dramatically by cutting uneconomic promotion.
| KPI | Latest disclosed anchor | How to interpret it |
|---|---|---|
| Monthly active users | 40M+ | Useful only when paired with retention, ad yield, and acquisition cost by cohort. |
| Cumulative downloads | 870M+ | Shows historical distribution reach, but not current engagement or profitability. |
| Countries reached | 140+ | Diversifies users while adding platform, currency, privacy, and collection complexity. |
| Gross margin | -81.5% computed for Q1 2026 | The clearest test of whether ad revenue exceeds direct acquisition and technology costs. |
| Advertising promotion / revenue | 155.5% computed for Q1 2026 | A ratio above 100% signals that promotion alone exceeded quarterly revenue. |
| Operating cash flow | +$0.07M in Q1 2026 | Must be decomposed into earnings versus working-capital collection. |
| Cash runway | Not disclosed as months | Track cash, liabilities, financing proceeds, and planned infrastructure commitments each period. |
The flexible workforce increases reliance on contractors and contract management. The data-center strategy will eventually require disclosure of secured megawatts, power, customers, financing, construction milestones, equity commitments, and returns. Until then, those ventures are not established segments.
Who owns Core AI stock, and how is the company governed?
Ownership is concentrated among legacy Core Gaming holders
The 2025 annual report lists several holders above 5%, with equal voting rights for all common shares. Xiaoxu Yang’s position is reported through Eniac AI and Eland Toyar: each row shows 20.27%, but both refer to the same combined 4.04M beneficial shares. Directors and officers held 10.8%, including CEO Aitan Zacharin at 8.16%.
| Holder or group | Beneficial shares | Reported stake | Governance implication |
|---|---|---|---|
| Xiaoxu Yang via Eniac AI / Eland Toyar | 4.04M | 20.27% | Largest disclosed economic and voting block; duplicate entity rows in the filing reflect common ownership. |
| Bedford Country Limited | 1.68M | 8.45% | A meaningful outside block in a company with fewer than 20M shares outstanding at the annual-report date. |
| Rakefet LLC | 1.63M | 8.16% | Owned by the CEO’s mother, making related-party context important. |
| Aitan Zacharin via Sapir LLC | 1.63M | 8.16% | Aligns the CEO economically while increasing insider influence. |
| Directors and officers as a group | 2.21M | 10.8% | Management has a material stake but not majority control. |
Leadership incentives deserve close reading
The board had five members in the annual report, three of whom were considered independent under Nasdaq standards. CEO Aitan Zacharin’s employment agreement runs initially through October 2030 and links salary and target bonus bands to annual revenue thresholds. Revenue-linked incentives can support growth, but in this company they should be balanced against gross margin, cash conversion, and dilution because high advertising spend can increase revenue without creating value. Gerald Bernstein stepped down as CFO effective June 30, 2026, and Arie Goor became CFO effective July 1 under a services arrangement costing $9,000 per month. The change is disclosed in the July 2026 CFO filing.
Which opportunities and risks could change the Core AI story?
The opportunity case requires contracts and cash returns, not an AI label. Gaming could improve through better acquisition ROI and partner economics. Data centers need power, sites, customers, and financing. HomeGPT needs a defined customer, pricing model, and distribution advantage.
The most material risk is financing before proof
Core AI had negative equity at March 31, 2026, a going-concern warning, and a gaming operation that produced negative gross profit. At the same time, it is pursuing data centers, a sector the annual filing explicitly calls highly competitive and capital intensive. This creates sequencing risk: shareholders may fund project development before customer contracts or acceptable returns are demonstrated. The June offering improved near-term liquidity but expanded the potential share count. Existing pre-funded warrants tied to a fixed $5.60M aggregate value also increased from approximately 3.44M at December 31, 2025 to 5.54M at March 31, 2026 as the share price declined, illustrating how financing structures can amplify dilution.
New initiatives remain early-stage
The latest corporate update says HomeGPT is being positioned as an AI-powered residential decision layer. That framing broadens the addressable use case, but it is still a product-positioning statement rather than a disclosed revenue segment. The July 2026 HomeGPT update should be read alongside the OptiCore joint-venture filing: both describe strategic direction, while the financial statements still show advertising as the sole revenue category.
Why does Core AI matter for valuation and DCF analysis?
A single-stage DCF is unsuitable because the company has negative gross profit, depends on financing, and is changing business models. Separate the gaming operation from speculative ventures. Model gaming through users, ad yield, acquisition spending, partner costs, and overhead; add data centers or HomeGPT only as probability-weighted scenarios after commercial milestones.
| Valuation driver | What to model | Current evidence |
|---|---|---|
| Gaming revenue | Active users × ad yield, adjusted for retention and title mix | Q1 2026 revenue contracted 74.0% after uneconomic placements were suspended. |
| Direct margin | Revenue less promotion, technology, and partner-sharing costs | Q1 2026 gross margin was approximately -81.5%. |
| Working capital | Receivable collections, prepayments, and supplier payables | Positive Q1 cash flow was driven by a $4.14M reduction in receivables and a $1.30M reduction in prepayments. |
| Infrastructure option value | Probability-weighted project cash flows after financing and customer commitments | No approved projects or financing commitments were disclosed in the annual filing. |
| Diluted equity base | Common shares plus exercisable or economically equivalent warrants | June 2026 financing added common shares and up to 3.98M pre-funded warrant shares. |
| Discount rate and terminal value | Higher risk premium and conservative terminal assumptions | Going-concern language, negative equity, platform dependence, and strategic execution risk raise uncertainty. |
What is the key takeaway from Core AI Holdings analysis?
Core AI Holdings is a newly reconfigured public company with a large mobile-game audience, historical distribution scale, publishing experience, and a Nasdaq vehicle for broader AI initiatives. Fiscal 2025 showed that the platform can generate advertising volume.
The financial standard is demanding: FY2025 growth produced negative gross profit, Q1 2026 revenue fell 74.0%, gross margin was approximately -81.5%, and March 31 equity was negative. The going-concern warning and June financing make capital access central. Data centers and HomeGPT were not reported revenue sources in the latest statements.
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