Bitcoin miner TeraWulf will lease over 70 megawatts of data center infrastructure to expand its artificial intelligence revenue as it continues to battle with rising Bitcoin mining costs.
TeraWulf said on Dec. 23 that AI and cloud provider Core42 would rent the 70 MW of infrastructure at the crypto miner’s Lake Mariner facility in upstate New York as its share price closed down 12% amid a broader market fall.
“The data center leases reflect TeraWulf’s strategic extension into AI-driven computing, complementing its profitable Bitcoin mining operations,” TeraWulf said.
The infrastructure will be energized in phases between the first and third quarters of 2025.
Source: TeraWulf
TeraWulf CEO Paul Prager said that “surging demand for scalable, energy-efficient infrastructure presents a tremendous opportunity,” and the partnership exposes the firm to both AI and Bitcoin (BTC) mining.
“This agreement not only diversifies our revenue streams but also significantly enhances our long-term earnings potential,” he added.
TeraWulf’s move into AI comes as the weighted average cash cost to mine one Bitcoin increased 13% to $55,950 over the third quarter of 2024, CoinShares reported earlier this month.
CoinShares noted the increased production costs resulted in public Bitcoin miners losing market share of the Bitcoin network’s hashrate.
Several Bitcoin miners have scaled back hashrate growth to pour more money into AI, CoinShares said — a technology that is now attracting the money and attention of traders and venture firms.
Other crypto miners have used capital to issue convertible notes to buy more Bitcoin for their books instead of scaling their operations.
The increased Bitcoin mining production costs arguably impacted TeraWulf’s balance sheet in Q3, where it reported earnings of minus 6 cents per share — falling significantly short of the widely estimated minus 3 cents per share.
However, TeraWulf has likely benefited from Bitcoin’s 48% price surge this quarter, which saw the cryptocurrency hit six figures for the first time.
In July, TeraWulf told Cointelegraph that it was open to a merger to boost its operating hashrate but wouldn’t do so for the sake of “empire building.”
It said it was focused on “organic growth” at its existing sites and shareholder returns.
TeraWulf (WULF) stock was one of the hardest-hit Bitcoin miners on Dec. 23, closing down 12.1% at $5.81 and recovering only 2% after hours, Google Finance data shows.
However, it is still one of the industry’s best performers in 2024, with its share price up 152.6% so far this year.
WULF’s change in share price in 2024. Source: Google Finance
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