Terawulf has become the latest cryptocurrency miner to pivot into AI infrastructure hosting and has reached a long-term agreement with Fluidstack, which defied Alphabet’s Google.
During a shareholder call on Thursday, the company announced that it had signed contract revenue worth $3.7 billion in contract revenue for a 10-year colocation lease agreement with AI infrastructure provider FluidStack. Once the five-year extension is used, that number will more than double.
Google’s involvement comes through supporting Fluidstack’s $1.8 billion lease obligation with Terawulf and providing debt financing. In return, Google received a warrant of approximately 41 million shares, accounting for about 8% of the company.
The agreement will increase the data center capacity of New York’s Terawulf by a load of over 200 megawatts.
“Given the expected improvements to our credit profile, we have improved our financing strategy to focus on a range of capital market initiatives (…) given the expected improvements in our credit profile from Google, and the benefits of our latest lease agreement,” Terawulf Chief Financial Officer Patrick Fleury told shareholders.
Founded in 2021 as a Bitcoin (BTC) mining company focusing on environmentally sustainable operations, Terawulf faces challenges in the post-harving environment. In the first quarter, the company reported a net loss of $61.4 million along with a sharp decline in revenue.
The company’s overall finances improved in the second quarter as Terawulf returned to profitability and recorded higher revenues compared to the first quarter.
The volatile BTC prices and rising infrastructure costs have made the economics of Bitcoin mining more difficult, and more companies have diversified into AI and encouraged high-performance computing to stabilize revenues.
Related: Jack Dorsey’s Block targets the 10-year life cycle of Bitcoin mining rigs
Terawulf will skyrocket with AI Pivot News
Terawulf’s latest business deal sparked a sharp rally in stock prices on Thursday.
According to Yahoo Finance data, Wulf’s stock has risen from a 48% high to $8.11, increasing its daily average by more than four times its trading volume.
The stock last traded at around $7.50, up 37% that day, giving the company a market capitalization of nearly $3 billion.
The rebound has brought Wolf back to the positive territory of the year.
Terawulf is pivoting on AI infrastructure, but for now it remains in Crypto Proxy stock. This is a status highlighted by continuous mining operations. In the second quarter, the company paid 485 BTC on its own, down from 699 in the same period last year.
At the end of the second quarter, Terawulf held $90 million in cash, cash equivalents and Bitcoin.
Related: Bitcoin Energy Value Metric is “fair” BTC price is as high as 167k
