TeraWulf recently shifted to AI infrastructure hosting and has signed a decade-long collaboration agreement with Fluidstack, supported by Google under Alphabet, which is expected to significantly enhance the company's revenue.
During Thursday's shareholder conference call, the company revealed that it has signed a 10-year contract with AI infrastructure provider Fluidstack, with contract revenue reaching $3.7 billion, which could more than double if extended by five years.
Google participated in this deal by supporting Fluidstack's $1.8 billion leasing obligations and providing debt financing, thus acquiring approximately 41 million shares of WULF, which accounts for about 8% of the company.
This agreement will expand TeraWulf's data center capacity in New York to over 200 megawatts of IT load.
CFO Patrick Fleury told shareholders, 'Given the expected improvement in our credit status, we have refined our financing strategy to focus on developing a range of capital market plans, along with Google's new financial support and updated leasing agreements.'
TeraWulf was established as an eco-friendly Bitcoin miner in 2021 but faced challenges in the environment following the halving; the company reported a net loss of $61.4 million in the first quarter.
In the second quarter, the company's financial condition improved and returned to profitability, with revenue increasing from the first quarter.
Faced with volatile BTC prices and rising infrastructure costs, the economics of Bitcoin mining are becoming increasingly challenging, prompting more companies to diversify into AI to stabilize revenue.
TeraWulf's stock price surged due to its AI transformation.
This new business venture from TeraWulf significantly boosted its stock price on Thursday.
According to Yahoo Finance, WULF's stock price rose 48% to $8.11 at one point, with trading volume more than four times the daily average. The closing price was about $7.50, a single-day increase of 37%, bringing the company's market value close to $3 billion.
The rebound has brought WULF's stock price back to positive territory for the year.
Although TeraWulf is venturing into AI infrastructure, it still maintains its positioning as a cryptocurrency mining company. In the second quarter, the company mined 485 Bitcoins, down from 699 in the same period last year.
As of the end of the second quarter, TeraWulf has $90 million in cash, cash equivalents, and Bitcoin.
