Crypto mining company TeraWulf is poised to raise $3 billion in debt to enhance its data center operations, a move that is expected to be bolstered by significant support from tech giant Google. This development comes amidst a growing competition for data center infrastructure driven by the booming artificial intelligence (AI) industry. According to TeraWulf CEO Patrick Fleury, the company is collaborating with Morgan Stanley to facilitate the funding, which is anticipated to launch as early as next month through avenues such as high-yield bonds or leveraged loans.
As part of the preparations, credit rating agencies are currently reviewing the upcoming deal, with Google’s backing potentially providing TeraWulf with a more favorable credit rating than it might otherwise have received. The increasing demand for data center space, processors, and electricity in the AI sector has led to unconventional partnerships, particularly as crypto miners like TeraWulf leverage their power-intensive infrastructures to cater to AI workloads.
Google recently enhanced its financial support for TeraWulf, raising its backstop to $3.2 billion. As a result of this partnership, Google now owns a 14% stake in TeraWulf. This collaboration has already proven beneficial for other companies in the sector; for instance, the AI cloud platform Fluidstack expanded its operations via a TeraWulf-run data center in New York in August.
Additionally, other cryptocurrency-focused entities are exploring similar alignments. Cipher Mining, for example, entered a comparable agreement with both Google and Fluidstack this week, in which Google will backstop $1.4 billion in obligations related to Cipher’s operations while also acquiring an equity stake in the firm.
In terms of market response, TeraWulf’s shares experienced a slight decline of approximately 1.3% during Friday’s trading session, remaining steady in after-hours activity.
