Struggling with Rising Costs, TeraWulf Turns to Artificial Intelligence
As the cryptocurrency market continues to face challenges, Bitcoin miner TeraWulf is looking to expand its revenue streams by leasing over 70 megawatts of data center infrastructure to Core42, an AI and cloud provider. This move comes as the company struggles with rising costs associated with Bitcoin mining.
Rising Costs Impacting Bitcoin Miners
The weighted average cash cost to mine one Bitcoin increased by 13% in the third quarter of 2024, reaching $55,950 according to CoinShares’ recent report. This significant increase has resulted in public Bitcoin miners losing market share of the Bitcoin network’s hashrate. In response, several Bitcoin miners have scaled back their hashrate growth to invest more money into AI.
TeraWulf’s Move into AI
TeraWulf’s decision to lease data center infrastructure to Core42 is a strategic extension of its profitable Bitcoin mining operations. The company believes that the increasing demand for scalable and energy-efficient infrastructure presents a tremendous opportunity. This partnership exposes TeraWulf to both AI and Bitcoin mining, diversifying its revenue streams and enhancing its long-term earnings potential.
Infrastructure Rollout Schedule
The 70 MW of data center infrastructure will be energized in phases between the first and third quarters of 2025. This rollout schedule allows TeraWulf to gradually integrate Core42’s operations into its existing infrastructure, minimizing disruptions and maximizing efficiency.
TeraWulf CEO Paul Prager on the Partnership
"TeraWulf’s strategic extension into AI-driven computing reflects our commitment to innovation and adaptability in a rapidly evolving market," said Paul Prager, TeraWulf CEO. "This agreement not only diversifies our revenue streams but also significantly enhances our long-term earnings potential."
Impact of Bitcoin Price Surge on TeraWulf
Despite the challenges faced by public Bitcoin miners, TeraWulf has likely benefited from Bitcoin’s 48% price surge in this quarter. The cryptocurrency hit six figures for the first time, and its value has increased significantly since July.
TeraWulf’s Organic Growth Strategy
In July, TeraWulf told Cointelegraph that it was open to a merger to boost its operating hashrate but would not do so for the sake of "empire building." The company is focused on organic growth at its existing sites and shareholder returns. TeraWulf’s decision to lease data center infrastructure to Core42 aligns with its commitment to organic growth.
TeraWulf Stock Performance
Despite facing challenges, TeraWulf (WULF) stock has been one of the industry’s best performers in 2024. Its share price closed at $5.81 on December 23, down 12.1% from the previous day. However, it recovered only 2% after hours, according to Google Finance data.
Conclusion
TeraWulf’s decision to lease over 70 MW of data center infrastructure to Core42 marks a significant step in its expansion into AI-driven computing. As the cryptocurrency market continues to evolve, TeraWulf is positioning itself for long-term success by diversifying its revenue streams and investing in scalable and energy-efficient infrastructure.
Related Articles
- Bet More on the Bitcoin Miners Cashing In on AI: Explore how other crypto miners are adapting to rising production costs by leveraging artificial intelligence.
- AI May Already Use More Power Than Bitcoin — And It Threatens Bitcoin Mining: Discover how the increasing demand for scalable and energy-efficient infrastructure is impacting Bitcoin mining operations.
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