TeraWulf Expands AI Partnership, Stock Soars 17%

TeraWulf’s expanded partnership with AI cloud company Fluidstack marks a significant escalation of the company’s August announcement detailing Google-backed plans to enter the artificial intelligence sector. The joint venture will develop 168 MW of critical IT load at a site in Abernathy, Texas during the second half of this year, backed by a substantial 25-year hosting commitment that provides long-term revenue visibility. TeraWulf will maintain controlling interest with a 51% stake in the venture, positioning the Bitcoin miner to capture substantial value from AI infrastructure development.

TeraWulf CEO Paul Prager emphasized the strategic nature of this evolution, stating: “This is exactly the evolution we outlined: converting advantaged infrastructure positions into contracted megawatts with investment-grade counterparties and doing so at strategic scale.” The partnership builds on the companies’ existing relationship, having signed their initial collaboration agreement in August with plans to construct a new data center. This expansion demonstrates TeraWulf’s commitment to leveraging its existing infrastructure and energy expertise to capitalize on the booming demand for AI computing power.

The market responded enthusiastically to TeraWulf’s announcement, sending WULF stock soaring nearly 17% to close at $17 per share on Tuesday, though shares subsequently dipped to $16.24 in after-hours trading according to Yahoo Finance data. This performance stood in stark contrast to the broader Bitcoin mining sector, which experienced significant declines on the same trading day. Riot Platforms tumbled 6.2%, while CleanSpark and MARA Holdings fell nearly 5.2% and 3.5% respectively, with IREN declining almost 4%.

The divergent performance highlights how investors are rewarding Bitcoin miners that successfully diversify into high-growth adjacent sectors like artificial intelligence. This pattern extends beyond TeraWulf, with Google recently announcing a separate deal to backstop an agreement between Fluidstack and Bitcoin miner Cipher, giving the tech giant the right to purchase a 5.4% stake in Cipher. Similarly, top publicly-traded miner Hut 8 unveiled plans in August to develop 1.53 gigawatts of new capacity across four U.S. sites, indicating broader industry momentum toward infrastructure diversification.

The strategic shift toward AI infrastructure comes as Bitcoin mining faces increasingly challenging economics following last year’s halving event, which reduced block rewards from 6.250 to 3.125 Bitcoin. Despite Bitcoin’s price appreciation—recently trading below $113,000 according to CoinGecko data, representing a 1.6% drop over 24 hours and about 10% below its all-time high above $125,000 earlier this month—mining difficulty has increased substantially. This compression in mining profitability has prompted miners to seek alternative revenue sources beyond traditional cryptocurrency validation.

Market participants remain divided on Bitcoin’s near-term trajectory, with a Myriad prediction market indicating approximately two-thirds of respondents agreeing with crypto trader Mando’s prediction that BTC will reach $120,000, rather than dropping to $100,000 as entrepreneur KBM expects. Regardless of Bitcoin’s price direction, the structural challenges in mining economics appear to be driving permanent changes in miner business models. The successful execution of AI infrastructure projects could provide Bitcoin miners with more stable, contracted revenue streams that are less dependent on cryptocurrency market volatility.