TeraWulf has become the latest cryptocurrency mining company to pivot towards AI infrastructure hosting, entering into a long-term agreement with Fluidstack, supported by Alphabet's Google—this move is expected to significantly enhance the company's revenue operating rate.
During a shareholder conference call on Thursday, the company disclosed that it has signed a 10-year hosting lease agreement with AI infrastructure provider Fluidstack, with a contract revenue value of $3.7 billion. If the five-year extension option is exercised, this figure could more than double.
Google's involvement is reflected in its support for Fluidstack's $1.8 billion lease obligation to TeraWulf and the provision of debt financing. In return, Google received warrants for approximately 41 million shares of WULF stock, representing about 8% of the company.
The agreement will increase TeraWulf's data center capacity in New York by over 200 megawatts of IT load.
"Given the anticipated improvement in our credit profile, we have refined our financing strategy, focusing on a range of capital market initiatives […] benefiting from Google's new financial support and our updated lease agreement," TeraWulf CFO Patrick Fleury told shareholders.
Founded in 2021, TeraWulf is a Bitcoin (BTC) mining company focused on environmentally sustainable operations, facing increasing challenges in a post-halving environment. In the first quarter, the company reported a net loss of $61.4 million, with a significant drop in revenue.
The financial situation of the entire company improved in the second quarter, with TeraWulf returning to profitability and revenue increasing compared to the first quarter.
Fluctuations in BTC prices and rising infrastructure costs have made the economics of Bitcoin mining increasingly difficult, prompting more companies to diversify into AI and high-performance computing to stabilize revenue.
TeraWulf's latest business agreement triggered a significant surge in its stock price on Thursday.
According to Yahoo Finance data, WULF's stock price rose as much as 48% during intraday trading to $8.11, with trading volume more than four times the daily average.
The stock's last trading price was approximately $7.50, up 37% on the day, bringing the company's market capitalization close to $3 billion.
This rebound has brought WULF back into positive returns for the year.
While TeraWulf is pivoting towards AI infrastructure, it still remains a cryptocurrency concept stock—its ongoing mining operations underscore this status. In the second quarter, the company mined 485 BTC, down from 699 BTC in the same period last year.
At the end of the second quarter, TeraWulf held $90 million in cash, cash equivalents, and Bitcoin.
Related: ARK Invest splurges $172 million to acquire Bullish stock, which surged 84% on its first day of trading.
Original article: “TeraWulf Secures $3.7 Billion AI Hosting Deal Backed by Google, Stock Soars”
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