Deng Tong, Jinse Finance
On August 14, 2025, Google announced an investment of $3.7 billion to acquire 8% of Bitcoin mining company TeraWulf. On August 18, TeraWulf announced a raise in its convertible bond sales to $850 million, with a net gain from the transaction expected to be $828.7 million. Buyers have a 13-day option to add $150 million to the transaction, which is expected to be completed this week. Google currently holds warrants for 14% of the company's shares.
As a result of positive news, TeraWulf's stock price has been on the rise since August 14, peaking at $10.52 on August 18, an increase of $5.22 from the low of $5.30 on August 13, representing a 98.49% increase, followed by a slight decline, and as of the time of this report, it is at $8.78, still maintaining a relatively high level.
1. Overview of TeraWulf's collaboration with Google
Last Thursday, TeraWulf announced at its shareholder meeting that it has signed a 10-year hosting lease agreement with AI infrastructure provider Fluidstack, with total contract revenues reaching $3.7 billion. If renewed for five years, this figure could more than double.
Google's participation includes supporting Fluidstack and TeraWulf's $1.8 billion leasing obligations and providing debt financing. In return, Google received warrants for approximately 41 million shares of TeraWulf stock, accounting for about 8% of the company's shares.
This week, Google continued to increase its stake in TeraWulf. TeraWulf Chief Strategy Officer Kerri Langlais revealed that Google's support in this agreement has now risen to $3.2 billion in exchange for warrants to purchase over 73 million shares of TeraWulf stock, accounting for 14% of the company. Google's new equity stake makes it the largest shareholder in TeraWulf, which "demonstrates strong recognition from one of the world's leading technology companies" and highlights "the strength of our zero-carbon infrastructure and the scale of future opportunities."
This collaboration will provide TeraWulf's Lake Mariner data center in western New York with over 200 megawatts of critical IT load (with a total capacity of approximately 250 megawatts), specifically designed for liquid-cooled AI workloads. TeraWulf's Lake Mariner facility is equipped with dual 345 kV transmission lines, a closed-loop water cooling system, and low-latency fiber connections, aiming to become a top-tier hyperscale data center that meets high-demand AI workloads. The first phase of deployment at the facility will provide 40 megawatts of capacity, expected to be operational in the first half of 2026, with full completion anticipated by the end of the year.
TeraWulf CEO Paul Prager called this TeraWulf's "decisive moment," while Chief Technology Officer Nazar Khan emphasized the facility's scalability and readiness.
Fluidstack President César Maklary emphasized the mutual commitment to rapid, scalable AI infrastructure.
Two, advancing towards HPC hosting business
TeraWulf was established in 2021 and is a Bitcoin mining company focused on environmentally sustainable operations.
According to TeraWulf's Q2 2025 earnings report released on August 8, the revenue for Q2 2025 was $47.6 million, compared to $35.6 million in Q2 2024; BTC mining capacity increased by 45.5% year-on-year, reaching 12.8 EH/s. In Q2 2025, the company mined 485 Bitcoins through Lake Mariner, while in Q2 2024, it was 699 Bitcoins. The decrease in mining numbers was mainly due to the halving in April 2024 and the strategic divestiture of the Nautilus Cryptomine facility in October 2024. The power cost per Bitcoin in Q2 2025 was $45,555, while in Q2 2024 it was $22,954, reflecting the halving, rising network difficulty, and short-term price fluctuations.
Since the Bitcoin halving, miners have been seeking to diversify revenue streams by shifting energy capacity towards AI and high-power computing (HPC) hosting services. TeraWulf also faces the common dilemma of Bitcoin mining companies on whether to make changes.
Asset management firm VanEck estimated in a report from August 2024 that if publicly listed Bitcoin mining companies transfer 20% of their energy capacity to AI and high-performance computing (HPC) by 2027, they could add an additional $13.9 billion in profits annually.
"In the short term, mining can generate cash flow and provide valuable resources for the grid, as its flexible load can be quickly adjusted to support stability and reliability." However, in the medium to long term, TeraWulf believes that transitioning the business to AI and high-performance computing workloads "holds greater value," and long-term contract revenues signed with blue-chip partners such as Fluidstack and Google "will drive growth and value creation."
TeraWulf Chief Financial Officer Patrick Fleury pointed out: "We will start recognizing revenue from high-performance computing (HPC) hosting business in the third quarter of 2025, marking a key turning point in our financial situation. With the implementation of our previously announced financing strategy and rigorous capital allocation approach, we are confident in achieving expansion responsibly while creating meaningful value for shareholders."
TeraWulf CEO Paul Prager stated: "TeraWulf continues to execute its strategy of developing scalable, sustainable digital infrastructure to support high-performance computing (HPC) hosting and proprietary Bitcoin mining." "In the second quarter, we made significant progress in delivering the 72.5 megawatt HPC capacity specified in the Core42 contract. The company delivered the WULF Den data center in July and began generating profits, with plans to deliver the CB-1 data center and generate revenue this month, followed by the CB-2 data center in the fourth quarter, in line with previous expectations. Meanwhile, we are in deep discussions about expanding the HPC hosting deployment at Lake Mariner and are actively seeking more data centers to support our long-term growth plan."
Three, why did Google invest in TeraWulf?
1. There is money to be made
As mentioned earlier, TeraWulf has signed a 10-year hosting lease agreement with AI infrastructure provider Fluidstack, with total contract revenues reaching $3.7 billion. If renewed for five years, this figure could more than double. The agreement adopts a modified master lease agreement with annual increases, and it is expected that the net operating profit margin at the site level will reach 85%, which translates to approximately $315 million per year. The total project cost is estimated at $8 million to $10 million per megawatt.
TeraWulf's stock price increase also reflects the market's recognition of the value of the collaboration between TeraWulf and Google—after Google announced its investment, TeraWulf's stock price rose nearly 100% in the short term. As the Lake Mariner data center becomes operational in 2026 and the scale of HPC hosting business expands, the company's revenue and profit growth will further enhance equity value, allowing Google, as the largest shareholder, to directly share in the benefits.
2. Supporting Google's AI competition
Google has made significant progress in the AI competition, with the Gemini series models achieving remarkable accomplishments. Gemini 2.5 Pro has swept multiple categories such as code, mathematics, and science on the LMArena leaderboard. The development of AI relies on HPC. HPC, as the power source, provides core support for the development of AI and big data, serving as the "engine" for AI development. During the training phase, large AI models need to process billions or even trillions of parameters, which cannot be accomplished with ordinary servers alone. HPC can significantly shorten the model training cycle through clustered architecture and parallel computing techniques; during the inference phase, real-time AI applications require low-latency responses, and HPC's high-speed interconnection technology and edge computing node deployment can ensure that AI models complete inference decisions within milliseconds.
In an interview with CNBC, TeraWulf CEO Paul Prager pointed out: "The partnership with Google is a decisive moment for TeraWulf. We are uniting world-class capital and computing partners to jointly build the next generation of AI infrastructure, powered by the industry's lowest-cost, nearly zero-carbon energy. The Lake Mariner site is very unique. It has dual 345 kV power transmission lines, a closed-loop water cooling system, and ultra-low latency fiber optic networks. These conditions are perfectly tailored for liquid-cooled, high-density AI computing."
Currently, TeraWulf has transitioned from Bitcoin mining to HPC hosting and plans to deliver multiple data center capacities. TeraWulf will support Google in its AI competition in the future.
Four, summary
The deep partnership between Google and TeraWulf is a win-win collaboration. TeraWulf, with the financial support and reputation of Google, has achieved a rise in stock price in the short term, and in the medium to long term, it can expand from a single mining track to HPC hosting services and AI infrastructure construction, finding new profit points. Google, on the other hand, can gain more computing power resources through its investment in TeraWulf to meet its computing needs for large model training and cloud services, and benefit from equity appreciation returns from TeraWulf's profits.
As competition in the AI sector intensifies, TeraWulf's development path is providing a transformative model for more cryptocurrency mining companies—riding on the fast track of tech giants, entering the lucrative sector, while actively expanding high-value-added businesses based on its existing operations, becoming a bridge to facilitate the collaborative development of traditional tech and crypto industries.
