The digital asset mining and high-performance computing (HPC) infrastructure company TeraWulf Inc. has revealed the formation of a major joint venture (JV) today with Fluidstack Ltd., a cloud computing provider, to expand its AI-focused data center capabilities.
The deal helps TeraWulf along in its pivot from primarily Bitcoin mining toward sustainable AI and HPC infrastructure. TeraWulf shares jumped 20% on Tuesday morning after the announcement.
Under the agreement, the parties will develop and deliver 168 MW of critical IT load at the Abernathy, Texas campus, backed by an investment-grade, long-duration infrastructure commitment through Fluidstack’s platform.
Terawulf enters the data center sweepstakes with Fluidstack
The deal, which aims to manage critical AI workloads at a cost of $8–10 million per megawatt, will inject about $9.5 billion in contracted revenue, with TeraWulf holding a 51% stake. It’s also possible the lease term is shortened to 20 or 15 years, but that will reportedly be up to Fluidstack to decide.
Fluidstack is getting partial support from Google, which has reportedly pledged about $1.3 billion of its commitments to help secure the project financing. It will also team up exclusively with Fluidstack for up to 51% of the next Fluidstack-led ~168 MW data center project on substantially similar commercial terms.
The separate transaction is expected to push TeraWulf’s contracted HPC platform above 510 MW of IT load, and the company aims to add another 250 MW to 500 MW of contracted IT load annually.
Paul Prager, Chief Executive Officer of TeraWulf, said about the new development: “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.”
He also added that their ability to secure over 510 MW of critical IT load in the past 10 months is “direct proof-point” of its growth strategy.
According to an official release, TeraWulf’s equity contributions to the joint venture will be made in staged installments, preserving corporate balance sheet flexibility without compromising on maintaining majority governance rights. The release also states that no TeraWulf equity securities or warrants were issued as a result 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
TeraWulf has rapidly transitioned into a high-performance computing data center provider, thanks to the benefits of surging AI-driven CapEx investments.
The centerpiece of this strategic pivot is its agreement with Core42, a UAE-based AI cloud and managed services provider backed by G42, whose investors include Microsoft, Silver Lake, and Mubadala Investment Company.
This deal made Core42 the first major HPC hosting client TeraWulf took on as the company shifts toward diversifying beyond Bitcoin mining. The agreement comes with a 60 MW contract with a 10-year initial term and two 5-year extension options, and it is expected to generate approximately $1.6 million per MW in base rent during the first year, after which it will escalate at 3% annually until it reaches $2 million per MW by year eight, with EBITDA margins of approximately 75%.
The recent moves from TeraWulf give it a unique advantage in the competitive landscape of both Bitcoin mining and HPC hosting due to its existing infrastructure at Lake Mariner. The company continues to claim its build cost per critical MW is lower than peers, a feat it is able to pull off because it refused to channel funds for site electrical infrastructure since it already exists at its facility.
While it does not seem to be making profits yet, projections expect the company’s HPC hosting economics to deliver attractive returns. The total capital expenditure for the HPC hosting business is estimated at $430 million, with a cost of approximately $7.2 million per critical MW.
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