TeraWulf leases 70 MW for AI, raises the cost of Bitcoin mining

TeraWulf is moving into AI by leasing data center space to Core42. This deal will help the company provide over 70 MW of power at its Lake Mariner facility. This shift from Bitcoin mining to AI will bring in more money and meet the growing need for energy-efficient infrastructure.

TeraWulf Expands into AI Infrastructure

TeraWulf Inc., mining company recently announced an expansion into artificial intelligence (AI) infrastructure. On December 23, the company revealed that it had signed agreements to lease data center space to Core42 which is an AI and cloud services provider.

According to the deal, TeraWulf will provide over 70 megawatts (MW) of data center power at its Lake Mariner facility in Upstate New York. The infrastructure will also be rolled out in phases between the first and third quarters of 2025. These data centers will be set up to support Core42’s GPU clusters, using advanced Dell Integrated Rack Scalable Solutions.

This partnership marks an important shift for TeraWulf, placing the company at the crossroads of two fast-growing industries: AI computing and Bitcoin mining. By leasing its data center space to Core42, TeraWulf is diversifying its sources of income and increasing its long-term earnings potential.

The company has mainly focused on Bitcoin mining with sustainable operations and is now expanding into AI as a new business model. The increasing demand for efficient, scalable computing infrastructure in both AI and cryptocurrency sectors gives TeraWulf a great opportunity to benefit from these growing markets.

TeraWulf’s CEO, Paul Prager, stressed how important this partnership is. He said it helps the company expand beyond Bitcoin mining and positions it as a leader in AI-driven computing.

He pointed out that moving into AI will be a key factor for future growth, especially as the company continues to use mostly zero-carbon-powered infrastructure. This fits with TeraWulf’s larger goal of offering energy-efficient and scalable solutions to meet the growing demand for digital infrastructure.

The data center lease agreement will provide TeraWulf with a steady and profitable income over time. The leases have two five-year renewal options and the chance to add 135 MW of power, which shows there is a lot of potential for growth.

TeraWulf’s ability to quickly set up customized data centers also puts it in a good position to meet growing demand in both the AI and cryptocurrency sectors.

TeraWulf’s move into AI comes at a time when Bitcoin mining is facing challenges. The cost of Bitcoin mining increases depending on several factors, such as electricity prices, hardware efficiency, and the mining space.

Increase in Bitcoin Mining rates

A recent report by CoinShares showed that the cost to mine a Bitcoin increased by 13%, reaching $55,950 in Q3 2024. This rise in costs has caused Bitcoin miners, including TeraWulf, to lose market share. Many are cutting back on mining to focus on AI projects, with some even buying Bitcoin directly instead of expanding their mining operations.

TeraWulf’s move into AI-driven computing is part of a wider trend in the cryptocurrency mining industry, where companies are seeking new revenue sources due to rising costs.

The company’s stock was affected by these challenges, with its price dropping 12.1% on December 23, reflecting broader market trends. However, TeraWulf has had a strong performance in 2024, with its stock price up by 152.6%, partly due to Bitcoin’s rise in value.

As businesses and governments continue to seek AI solutions currently, the demand for this type of computing is expected to rise. TeraWulf’s focus on providing AI infrastructure powered mostly by zero-carbon energy gives it an edge in this market.

TeraWulf’s partnership with Core42 is a smart move that sets the company up for long-term success in both AI and cryptocurrency.

While it faces challenges in Bitcoin mining, its shift to AI-driven computing could help the company grow. With its focus on energy-efficient infrastructure, TeraWulf is well-placed to take advantage of the increasing demand for both AI and cryptocurrency services.

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