TeraWulf Rents 70MW to Host AI as Bitcoin Mining Costs Soar
TeraWulf is looking to expand into the hot AI space as Bitcoin mining difficulty increases and profitability shrinks.
Bitcoin mining company TeraWulf will lease more than 70 megawatts of data center infrastructure to expand its AI revenue as it grapples with rising bitcoin mining costs.
TeraWulf said on Dec. 23 that artificial intelligence and cloud services company Core42 will lease 70 megawatts of infrastructure at the cryptocurrency mining company’s Lake Mariner facility in upstate New York as its stock price closed down 12% amid a broader market decline.
“These data center leases reflect TeraWulf’s strategic expansion into AI-powered computing, complementing its profitable Bitcoin mining operations,” TeraWulf said.
The infrastructure will be operational in phases between the first and third quarters of 2025❤️🔥🌹
“The growing demand for scalable, energy-efficient infrastructure represents a tremendous opportunity,” said TeraWulf CEO Paul Prager, and the partnership exposes the company to both AI and Bitcoin.
Bitcoin
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“This agreement not only diversifies our revenue streams, but also significantly enhances our long-term profit potential,” he added.
TeraWulf's move into AI comes as the weighted average monetary cost of mining a single bitcoin rose 13% to $55,950 in Q3 2024, CoinShares reported earlier this month.
CoinShares noted that rising production costs have led to public Bitcoin miners losing their share of the Bitcoin network’s hash rate.
CoinShares said many Bitcoin miners have reduced hash rate growth to pump more money into AI.
Other cryptocurrency miners have used the capital to issue convertible bonds to buy more bitcoin for their ledgers rather than expand their operations.
Higher bitcoin mining costs arguably weighed on TeraWulf’s balance sheet in the third quarter, when it reported earnings of -6 cents per share — significantly below the widely-held estimate of -3 cents per share.
However, TeraWulf likely benefited from Bitcoin's 48% price surge this quarter, which saw the cryptocurrency hit six figures for the first time.
Related: Bet More on Bitcoin Miners Leveraging AI
In July, TeraWulf told Cointelegraph that it was open to a merger to boost its operational hash rate but would not do so for the sake of “empire building.”
It said it was focused on "organic growth" at its current locations and shareholder returns.
TeraWulf (WULF) stock was one of the hardest-hit bitcoin mining companies on Dec. 23, closing down 12.1% at $5.81 and recovering just 2% in after-hours trading, according to Google Finance data.
However, it is still one of the best performing companies in the industry in 2024, with its stock price up 152.6% this year.
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