TeraWulf seeks $3.5 billion debt deal for AI data center push

Bitcoin miners spent a decade building power infrastructure. Now AI companies are paying billions to use it.

TeraWulf Inc. is seeking $3.5 billion in debt financing led by Morgan Stanley to expand its Kentucky data center campus leased to Anthropic, marking one of the largest capital raises yet by a publicly traded Bitcoin miner pivoting to artificial intelligence infrastructure.

"Hyperscalers need land, energized power infrastructure, and grid access — and mining companies already control all three," Calvin Tintle, senior manager at CoinShares Asset Management, said during a July 14 webinar.

The 20-year lease with Anthropic covers about 401 megawatts of critical IT load and is expected to generate roughly $19 billion in contracted revenue over its initial term, according to TeraWulf. The company sold $1.3 billion in high-yield bonds in December and $3.2 billion in October, becoming the first Bitcoin miner to access that market, Chief Financial Officer Patrick Fleury said.

The deal reflects a structural shift in which Bitcoin miners are transforming energy-intensive mining sites into AI-ready data centers. CoinShares projects about 80% of listed Bitcoin miners will earn AI revenue by year's end, up from a business once built almost entirely around cryptocurrency rewards. Texas grid operator ERCOT is fielding 430 gigawatts of connection requests — roughly five times the state's record peak of about 80 gigawatts — with about 90% from data centers, according to Matthew Kimmell, digital asset research analyst at CoinShares.

The AI Infrastructure Gold Rush

The financing combines leveraged loans with high-yield bonds and marks TeraWulf's first entry into the leveraged loan market, Fleury said. Morgan Stanley reiterated its Overweight rating on the stock and raised its price target to $72 from $66.50 on July 7, citing the Anthropic partnership as a key driver. TeraWulf shares rose 4.5% to $23.87 on Thursday and are up more than 80% year to date.

To help fund its AI expansion, TeraWulf also sold its 50% stake in a 168-megawatt data center in Abernathy, Texas, to an investor group led by Fluidstack.

The trend extends well beyond TeraWulf. Core Scientific signed a 12-year, $10 billion hosting agreement with CoreWeave. Hut 8 entered a 15-year, $7 billion lease with Fluidstack. CleanSpark announced a $6.6 billion, 20-year infrastructure lease. Cipher Mining reached a multibillion-dollar, Google-backed agreement with Fluidstack.

Returns Vary Across the Sector

Bernstein analysts said Core Scientific's 75% return on assets from its CoreWeave deal was driven by an unusually capital-expenditure-light structure rather than contract terms other miners could replicate. CoreWeave financed $750 million of the $855 million buildout through revenue prepayments, leaving Core Scientific to fund just $105 million.

TeraWulf and Cipher posted stabilized returns of 5% and 4% on assets respectively — a more realistic benchmark for miners entering the AI infrastructure space, Bernstein said.

Kimmell said Bitcoin mining still functions as a buyer of last resort for electricity. Unlike AI data centers, mining rigs require no signed customer contracts and can be switched on or off instantly. That flexibility lets miners monetize stranded or cheap power while adding AI as a complementary revenue stream rather than abandoning Bitcoin entirely.

This article is for informational purposes only and does not constitute investment advice.