Core AI Sheds Siyata Mobile to Fuel AI-Driven Gaming Ambitions

MIAMI, FL – December 29, 2025 – Core AI Holdings, Inc. (Nasdaq: CHAI) today announced the immediate divestiture of Siyata Mobile Inc., shedding the struggling hardware manufacturer just months after a merger intended to pivot the company toward artificial intelligence. The move halts an approximate $12 million annual cash burn and sharpens Core AI’s focus exclusively on its AI-driven mobile gaming and content creation businesses, even as the market reacted with immediate skepticism, sending shares down over 8% in trading.

In a decisive strategic reversal, the AI-focused mobile games developer simultaneously signed and closed the deal to offload Siyata and its subsidiaries. The transaction underscores the company's aggressive pivot to a pure-play AI strategy, unwinding a corporate marriage that failed to produce its intended results.

“As we continued to deepen our focus on artificial intelligence, it became clear that the anticipated technology and commercial synergies with Siyata did not materialize,” said Aitan Zacharin, CEO of Core AI Holdings, Inc., in a statement. “The divestiture eliminates approximately $12 million in annual cash burn, materially reduces losses and simplifies our balance sheet.”

A Strategic U-Turn After a Short-Lived Merger

The divestiture marks a swift and dramatic end to a partnership that began with high hopes only three months prior. In a deal that closed on October 3, 2025, Siyata Mobile, a maker of rugged communication devices, merged with Core Gaming in an all-stock transaction. The combined entity was rebranded as Core AI Holdings and debuted on the Nasdaq with the mission of transforming the hardware-centric Siyata into a business focused on the burgeoning field of AI applications.

However, the integration proved untenable. Siyata Mobile, which specializes in Push-to-Talk over Cellular (PoC) devices and in-vehicle systems for first responders and enterprise clients, carried a heavy financial burden. The company has a documented history of unprofitability, posting a net loss of $25.3 million on revenues of $11.6 million for the full fiscal year 2024. This trend continued into 2025, with Siyata contributing significantly to Core AI’s consolidated losses. Its business model, reliant on hardware sales in a niche B2B market, was a fundamental mismatch with Core AI’s high-growth, scalable software ambitions.

The failure to find synergy between a capital-intensive hardware business and a nimble AI software developer became a critical drain on resources. The divestiture is a clear admission that the initial merger strategy was flawed, forcing leadership to perform a rapid course correction to protect its core objectives.

Sharpening the Financial Profile for an AI Future

The primary driver behind the sale is financial discipline. By removing Siyata from its books, Core AI projects a significantly healthier financial profile. Based on pro forma figures as of September 30, 2025, the company’s net loss for the first nine months of the year is reduced by an estimated $8.7 million, dropping from $12.5 million to a more manageable $4.8 million. The move also shrinks the balance sheet, with total assets decreasing by $20.0 million and total liabilities by $4.1 million.

The terms of the deal further highlight that the transaction was designed to stop the bleeding rather than generate a substantial return. Core AI will receive just $100,000 in cash upfront. The remaining consideration is tied to a three-year earn-out structure, where Core AI will receive the greater of $200,000 or 1% of Siyata's gross revenue annually. This structure effectively transfers the risk of Siyata’s future performance to its new, undisclosed owners while providing Core AI with a clean break.

Despite the positive strategic spin from management, investors reacted negatively to the news. Core AI's stock (CHAI) fell 8.61% on the day of the announcement, wiping out approximately $4 million in market capitalization. The decline, which pushed the stock near its 52-week low, suggests market concern over the asset write-down and the implicit failure of the recent merger, even if the move is intended to strengthen the company's long-term prospects.

Doubling Down on AI-Driven Gaming and Content

Freed from the operational and financial drag of the hardware business, Core AI is now poised to channel all its capital and resources into its primary subsidiary, Core Gaming, and its broader AI initiatives. Core Gaming is a global mobile games publisher with a substantial track record, having developed or co-developed over 2,200 games that have generated more than 800 million downloads from a base of 40 million users worldwide.

The company is aggressively expanding beyond traditional gaming into the generative AI space. Recent initiatives include the launch of LikeMusic.ai, a platform for creating original, production-quality music, and the AI COMIC app, a visual generation tool that transforms images and videos into anime-style content using advanced multimodal AI models. This app allows for AI-generated video, personalized avatars, and realistic face swaps, all powered by a proprietary, cloud-based AI infrastructure designed for scalability and efficiency.

This technology is also being turned inward to streamline its own game development pipeline. Core AI is leveraging state-of-the-art AI models to automate the creation of game assets, characters, and animations, drastically reducing production timelines and costs. Through a partnership with AI technology studio Guangzhou WeiXuan, the company is also co-developing new AI-powered productivity and creative tools.

“With the divestiture of Siyata complete, Core AI is operating with a leaner cost structure and a clearer growth mandate,” Zacharin stated. “We are now positioned to more aggressively invest in advancing our AI platform and pursue targeted growth initiatives that we believe can scale efficiently.”

This singular focus is critical to achieving the company's ambitious goal of reaching $300 million in annual revenue within the next three years. By shedding its non-core asset, Core AI is making a high-stakes bet that its future lies not in diversified hardware, but in becoming a leader at the intersection of artificial intelligence and interactive entertainment.