TeraWulf to Raise $3 Billion with Morgan Stanley’s Assistance

TeraWulf to raise $3 billion for data centers with Google's backing.

The mining firm TeraWulf is set to raise approximately $3 billion for data center construction through a Google-backed structure. This was reported by the company’s CFO, Patrick Fleury, to Bloomberg.

The potential deal is being organized by the financial conglomerate Morgan Stanley. According to Fleury, it could be executed as early as October in the form of high-yield bonds or a leveraged loan.

Rating agencies are currently evaluating the deal with a rating scale ranging from BB to CCC, typically applied to “junk” debts. Google’s involvement is expected to enhance the rating.

In August, the cloud AI platform Fluidstack decided to expand its use of TeraWulf’s data center in New York. Google provided financial guarantees amounting to $3.2 billion. In return, the tech company received an option to acquire a 14% stake in the miner.

In September, Google assisted Fluidstack in securing a lease agreement with another cryptocurrency miner, Cipher Mining. The American corporation guaranteed the English startup’s obligations amounting to $1.4 billion in exchange for 5.4% of the miner’s shares.

The AI segment boom has led to an unprecedented shortage of data center space, Bloomberg noted. The search for sites has led many specialists to bitcoin miners, who already had the necessary resources and were seeking more profitable ways to utilize them.

One of the largest deals in this direction was the acquisition of the mining center operator Core Scientific by the AI computing power provider CoreWeave for $9 billion.

AI Shift Positively Impacts Miners’ Stock Prices

Analysts at JPMorgan and Citigroup have raised their forecasts for bitcoin miner Riot Platforms amid the company’s shift to high-performance computing. This was reported by CoinDesk.

Experts rated the company’s shares as “above market.” They also maintained a similar rating for the shares of Cipher Mining and MARA Holdings.

The bank’s specialists downgraded IREN’s rating to “below market” and CleanSpark to “neutral.”

JPMorgan estimates a 50% probability of Riot, Cipher, and IREN entering new short-term agreements to host AI equipment. Based on the CoreWeave and Core Scientific deal, the bank’s specialists believe the cost of such contracts will range from $3.7 to $8.6 million per 1 MW of provided capacity.

CoreWeave was also involved in cryptocurrency mining before transitioning to the AI segment. In March, the company entered into a partnership agreement with OpenAI worth up to $11.9 billion.