TeraWulf plans to lease 70 MW for AI hosting as Bitcoin mining costs rise.
TeraWulf is set to expand into the rapidly growing AI sector as Bitcoin mining difficulty rises and profitability declines. The Bitcoin mining firm will lease over 70 megawatts of data center capacity at its Lake Mariner facility in upstate New York to support its artificial intelligence initiatives, struggling with increasing mining costs for Bitcoin.
On Dec. 23, TeraWulf announced that AI and cloud provider Core42 would rent the 70 MW of infrastructure, with its share price closing down 12% amid a broader market decline.
“TeraWulf’s data center leases mark a strategic shift into AI-driven computing, complementing our profitable Bitcoin mining operations,” said the company.
The infrastructure will be energized in phases between the first and third quarters of 2025. TeraWulf CEO Paul Prager noted that “rising demand for scalable, energy-efficient infrastructure presents a significant opportunity,” and this partnership positions the company to benefit from both AI and Bitcoin mining.
“This agreement not only diversifies our revenue streams but also enhances our long-term earnings potential,” he added.
TeraWulf’s move into AI comes as CoinShares reported that the average cost to mine one Bitcoin increased 13% to $55,950 in Q3 2024. Higher production costs led public Bitcoin miners to lose market share of the network’s hashrate, with many shifting capital toward AI rather than expanding mining operations.
TeraWulf’s balance sheet was impacted in Q3 when it reported a loss of 6 cents per share, missing expectations of a loss of 3 cents per share. However, the company likely benefited from Bitcoin’s 48% price surge this quarter, which pushed the cryptocurrency to a six-figure milestone for the first time. In July, TeraWulf expressed openness to potential mergers to enhance its operational hashrate, but emphasized a focus on organic growth and shareholder returns instead.
On Dec. 23, TeraWulf (WULF) stock saw one of the largest declines among Bitcoin miners, closing down 12.1% at $5.81, though it recovered slightly by 2% after hours, according to Google Finance data.
Despite this, TeraWulf remains one of the top-performing Bitcoin miners of 2024, with its share price increasing by 152.6% over the year.
What's Your Reaction?
