Google partners with Bitcoin miner TeraWulf in a $3.7 billion AI infrastructure agreement
In a significant move, Bitcoin mining company TeraWulf has announced a 10-year colocation agreement with AI platform Fluidstack, worth $3.7 billion. This deal marks one of the largest crypto-to-AI pivots as miners grapple with challenging post-halving economics.
Under the agreement, TeraWulf will deliver over 200 MW of computing capacity at its Lake Mariner facility in New York, purpose-built for liquid-cooled AI workloads. The first 40 MW of computing capacity is expected to be online by mid-2026, with full deployment by year-end.
The institution that registered this 40-MW AI computing capacity at TeraWulf's Lake Mariner site is Fluidstack. This agreement is part of a larger 10-year deal for over 200 MW of AI-optimized capacity, financially backed by Google. Google will backstop $1.8 billion of Fluidstack's obligations and receive warrants for approximately 41 million TeraWulf shares.
The deal demonstrates how crypto miners are leveraging their existing infrastructure and energy expertise to tap into AI's explosive growth. TeraWulf's transition to AI hosting allows the company to maintain its zero-carbon energy focus while accessing more stable, long-term revenue streams.
Despite the shift in focus, the agreement does not mention any changes to TeraWulf's market cap or its reported net loss or return to profitability. TeraWulf reported a $61.4 million net loss in Q1 but returned to profitability in Q2. The company's Bitcoin production dropped to 485 BTC in the second quarter from 699 BTC a year earlier, but the agreement does not mention any impact on Bitcoin production for TeraWulf.
Google's financial backing will support an $8-10 million per MW infrastructure buildout for TeraWulf. The potential value of the agreement could reach $8.7 billion through lease extensions. The deal has caused WULF shares to surge, settling around $8.71, up 59.52% for the day, pushing TeraWulf's market cap to $3.41 billion.
TeraWulf expects 85% net operating income margins on the AI hosting business, translating to roughly $315 million annually. This move is expected to provide a steady stream of revenue for TeraWulf, enabling the company to continue its focus on sustainable energy solutions and AI computing.
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