TeraWulf Partners for AI Data Centers, Expands HPC

TeraWulf Forms Strategic AI Data Center Joint Venture

Digital asset mining and High-Performance Computing (HPC) infrastructure company TeraWulf Inc. has announced a significant joint venture with cloud computing provider Fluidstack Ltd. This collaboration is designed to bolster TeraWulf’s data center capabilities specifically for Artificial Intelligence (AI) workloads.

The partnership marks a key step in TeraWulf’s strategic shift from its core business of Bitcoin mining towards establishing itself as a provider of sustainable AI and HPC infrastructure. Following the announcement, TeraWulf’s stock experienced a notable surge, increasing by 20% on Tuesday morning.

Expanding AI and HPC Infrastructure

Under the terms of the agreement, TeraWulf and Fluidstack will collaborate to develop and deploy 168 megawatts (MW) of critical IT load at the Abernathy, Texas campus. This expansion is supported by Fluidstack’s platform, which provides an investment-grade, long-duration infrastructure commitment.

The deal is projected to manage critical AI workloads with an estimated cost of $8 to $10 million per megawatt. This venture is expected to generate approximately $9.5 billion in contracted revenue, with TeraWulf holding a majority stake of 51%. The lease term could potentially be adjusted to 20 or 15 years, depending on Fluidstack’s decision.

💡 Google is extending partial financial support for this initiative, reportedly pledging around $1.3 billion of its commitments to aid in securing the project financing. Furthermore, Google will exclusively partner with Fluidstack for up to 51% of the next Fluidstack-led data center project, which is expected to be approximately 168 MW and operate under similar commercial terms.

This separate transaction is anticipated to increase TeraWulf’s contracted HPC platform capacity to over 510 MW of IT load. The company has set an ambitious goal to add an additional 250 MW to 500 MW of contracted IT load annually.

Paul Prager, CEO of TeraWulf, commented on the development, stating, On our last conference call — immediately following the Lake Mariner announcement — I made clear that our focus was execution, execution, execution. Today’s transaction demonstrates that execution in practice.”

Prager further highlighted that the company’s success in securing over 510 MW of critical IT load within the last ten months is a clear indicator of its growth strategy in action.

According to an official release, TeraWulf will contribute its equity to the joint venture in phased installments. This approach is designed to maintain the flexibility of its corporate balance sheet while ensuring it retains majority governance rights. The release also confirmed that no TeraWulf equity securities or warrants were issued as part of this transaction.

“Fluidstack is proud to partner again with TeraWulf as we expand our platform to support next-generation GPU clusters for foundation model developers,” said César Maklary, Co-Founder and President of Fluidstack. “TeraWulf brings exceptional operational discipline, energy expertise, and development scale at precisely the moment the market requires hardened, sustainable infrastructure.”

TeraWulf’s Strategic Pivot to AI and HPC

TeraWulf has rapidly transformed into a significant provider of high-performance computing data center services. This evolution has been fueled by the substantial capital expenditure investments driven by the surging demand in the AI sector.

A cornerstone of this strategic shift is TeraWulf’s existing agreement with Core42, an AI cloud and managed services provider based in the UAE. Core42 is backed by G42, with investors including tech giants like Microsoft, Silver Lake, and Mubadala Investment Company.

This deal positioned Core42 as TeraWulf’s first major HPC hosting client as the company diversifies its business beyond Bitcoin mining. The agreement includes a 60 MW contract with an initial term of 10 years, plus two 5-year extension options. It is projected to generate approximately $1.6 million per MW in base rent during the first year, escalating annually at 3% until reaching $2 million per MW by the eighth year, with estimated EBITDA margins around 75%.

⚡ TeraWulf’s recent strategic moves provide a distinct advantage in the competitive landscape of both Bitcoin mining and HPC hosting. This advantage stems from its established infrastructure at Lake Mariner.

⚡ The company maintains that its build cost per critical MW is lower than its competitors, largely due to its existing electrical infrastructure at its facility, which negates the need for new capital outlays for this component.

📊 While profitability may not yet be fully realized, projections indicate that TeraWulf’s HPC hosting operations are expected to deliver attractive returns. The total capital expenditure for the HPC hosting business is estimated at $430 million, with an approximate cost of $7.2 million per critical MW.