Cryptocurrency mining company TeraWulf plans to raise $500 million through a convertible note offering to fund the construction of a new data center campus in Abilene, Texas.
The company announced on Wednesday that this private placement is aimed at qualified institutional buyers. The company has granted underwriters a 13-day option after the offering to purchase an additional $75 million in notes based on market conditions.
These convertible senior notes, which will mature on May 1, 2032, do not bear fixed interest and can only be converted under specific conditions before February 20232. Investors will have the right to choose to convert the notes into cash, TeraWulf stock, or a combination of both, with specific pricing and conversion terms to be determined through final negotiations.
TeraWulf noted that the funds raised will be used to finance the Texas data center project as well as for general corporate purposes.
This new financing comes on the heels of recent reports that TeraWulf is working with Morgan Stanley to raise up to $3 billion in debt financing, while Google provides $1.4 billion in guarantees to expand the company's AI-ready facilities and strengthen its position in supporting next-generation computing.
In August, TeraWulf also signed a $3.7 billion hosting agreement with AI infrastructure company Fluidstack (backed by Google), which has acquired a 14% stake in the mining company.
Experts point out that TeraWulf's series of initiatives coincides with a surge in AI that has led to severe shortages in data center space, GPU chips, and reliable power supply. Large cryptocurrency mining companies, with their existing data center infrastructure and secured power capacity, are well-positioned to benefit from this situation.
Earlier this month, Mike Novogratz's Galaxy Digital raised $460 million from one of the world's largest asset management firms to expand its Helios AI data center campus in Texas. The deal involves purchasing 12.77 million Class A shares at $36 per share, aiming to provide 133 megawatts of IT capacity by early 2026.
This funding is a supplement to the $1.4 billion loan Galaxy secured in August, which will provide 80% of the funding for the Helios project. Under a 15-year agreement with CoreWeave, Galaxy will provide computing power for AI and high-performance computing workloads, expected to generate approximately $1 billion in revenue annually.
Related: Brazilian solar company Thopen explores Bitcoin (BTC) mining to absorb excess power
Original article: “TeraWulf Seeks $500 Million Financing, Betting AI is the New Bitcoin”
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