TeraWulf secures $3.7B AI hosting deal backed by Google, shares soar

5 days ago

TeraWulf has go the latest cryptocurrency miner to pivot into AI infrastructure hosting, reaching a semipermanent statement with Fluidstack that’s backstopped by Alphabet’s Google — successful a determination expected to importantly summation the company’s gross tally rate.

During its shareholder telephone connected Thursday, the institution disclosed that it has signed 10-year colocation lease agreements with Fluidstack, an AI infrastructure provider, worthy $3.7 cardinal successful declaration revenue. That fig could much than treble if five-year extensions are exercised.

Google’s engagement comes done supporting Fluidstack’s $1.8 cardinal lease obligations with TeraWulf and providing indebtedness financing. In return, Google received warrants for astir 41 cardinal WULF shares, representing astir 8% of the company.

The woody volition grow TeraWulf’s information halfway capableness successful New York by much than 200 megawatts of IT load.

“Given the expected betterment successful our recognition profile, we’ve refined our financing strategy to absorption connected a bid of superior markets initiatives [...] with the payment of our caller fiscal enactment from Google and our updated lease agreements,” TerraWulf Chief Financial Officer Patrick Fleury told shareholders.

TeraWulf, founded successful 2021 arsenic a Bitcoin (BTC) mining institution focused connected environmentally sustainable operations, has faced mounting challenges successful the post-halving environment. In the archetypal quarter, the institution reported a nett nonaccomplishment of $61.4 cardinal alongside a crisp driblet successful revenue.

Companywide financials improved successful the 2nd quarter, arsenic TeraWulf returned to profitability and posted higher revenues compared with the archetypal quarter.

Volatile BTC prices and rising infrastructure costs person made Bitcoin mining economics progressively difficult, prompting much companies to diversify into AI and high-performance computing to stabilize revenue.

TeraWulf shares surge connected AI pivot news

TeraWulf’s latest concern woody sparked a crisp rally successful its stock terms connected Thursday.

WULF shares jumped arsenic overmuch arsenic 48% intraday to a precocious of $8.11, with trading measurement much than quadrupling the regular average, according to Yahoo Finance data.

The banal past traded astir $7.50, up 37% connected the day, giving the institution a marketplace capitalization of astir $3 billion.

The rebound has pushed WULF backmost into affirmative territory for the year.

While TeraWulf is pivoting into AI infrastructure, it remains, for now, a crypto proxy banal — a presumption underscored by its continued mining operations. In the 2nd quarter, the institution self-mined 485 BTC, down from 699 successful the aforesaid play a twelvemonth earlier.

At the extremity of Q2, TeraWulf held $90 cardinal successful cash, currency equivalents and Bitcoin.

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