Bitcoin Miner TeraWulf Raises $575 Million to Pivot Into AI Data Centers Amid Mining Challenges

Bitcoin Miner TeraWulf Aims to Raise $575 Million to Fund Google-Backed AI Ambitions - Decrypt

The funding will be raised via $500 million of convertible notes with plans to raise another $75 million in debt after the first offering. Convertible notes are a form of debt that can be converted into a company's stock or cash by an investor. TeraWulf on Tuesday said it was expanding its partnership with AI compute company Fluidstack by building a data center with more computing power. The two first signed a Google-backed deal to work together with the plan of a site in Abernathy, Texas in the second half of this year under a 25-year hosting commitment. TeraWulf stock (WULF) dipped slightly on the news and was recently priced at $15.89 per share. Shares soared on Tuesday after the company said it was scaling its deal with Fluidstack. Over the past five days, WULF has risen nearly 26%, according to Yahoo Finance data. The company is the latest to delve into the world of data centers. Mining Bitcoin has grown more challenging after last year's halving cut the amount of digital coins earned from 6.250 to 3.125. Minting coins has become harder, and the price of the leading cryptocurrency hasn't shot up as aggressively as in previous cycles, prompting miners to look for new revenue sources. Bitcoin miners -- typically large operations run by companies in warehouses full of energy-intensive, expensive computers -- receive Bitcoin for keeping the network running. They often have to sell crypto to cover their operating costs. Mining companies are looking to AI data centers to grow revenue. Top publicly-traded miner Hut 8 in August unveiled plans to develop 1.53 gigawatts of new capacity across four U.S. sites. Google in September announced a separate deal to backstop a deal between Fluidstack and Bitcoin miner Cipher, giving Google the right to buy a 5.4% stake in Cipher. Bitcoin was recently trading at about $112,350, down 2.5% over the past 24 hours, according to data provider CoinGecko. In a Myriad prediction market, about two in three respondents agreed with crypto trader Mando who has predicted that BTC would regain $120,000. Myriad is a unit of Dastan, the parent company of an editorially independent Decrypt.

TeraWulf looks to raise $500M as it bets big that AI is the new Bitcoin

The latest push follows TeraWulf's earlier $3 billion financing effort with Morgan Stanley and Google's $1.4 billion backstop, plus a $3.7 billion hosting deal with Fluidstack. Crypto mining company TeraWulf has announced plans to raise $500 million through a convertible note offering to help finance the construction of a new data center campus in Abernathy, Texas. The private offering is aimed at qualified institutional buyers, the company announced on Wednesday. It also granted underwriters the option to purchase an additional $75 million in notes within 13 days of issuance, depending on market conditions. The convertible senior notes, due on May 1, 2032, will carry no regular interest, with conversion available only under specific conditions before February 2032. Investors will have the option to convert the notes into cash, TeraWulf shares, or a combination of both, with pricing and conversion terms to be determined through final negotiation. TeraWulf said proceeds from the raise will go toward funding the Texas data center project and for general corporate purposes. Related: Bitcoin miner TeraWulf to raise $3B for Google-backed data center: Report The new offering follows recent reports that TeraWulf is working with Morgan Stanley to raise up to $3 billion in debt financing, with Google providing a $1.4 billion backstop, to expand the firm's AI-ready facilities and strengthen its role in powering next-generation computing. In August, TeraWulf also inked a $3.7 billion hosting deal with AI infrastructure firm Fluidstack, backed by Google, which acquired a 14% stake in the miner. The push by TeraWulf comes as the AI boom has created severe shortages of data center space, GPU chips and reliable electricity access. Large crypto mining companies are well-positioned to capitalize on this boom as they already possess existing data center infrastructure and secured power capacity. Related: Google takes 14% stake in Bitcoin miner TeraWulf, becoming top shareholder Earlier this month, Mike Novogratz's Galaxy Digital raised $460 million from one of the world's largest asset managers to expand its Helios AI data center campus in Texas. The deal, involving the purchase of 12.77 million Class A shares at $36 each, aims to deliver 133 megawatts of IT capacity by early 2026. The funding builds on Galaxy's $1.4 billion loan secured in August to finance 80% of the Helios buildout. Under a 15-year agreement with CoreWeave, Galaxy will supply compute power for AI and high-performance computing workloads, generating an estimated $1 billion in annual revenue. Magazine: Bitcoin OG Kyle Chassé is one strike away from a YouTube permaban