TeraWulf, a Bitcoin mining company, has announced plans to lease over 70 megawatts of data center infrastructure to facilitate its entry into the artificial intelligence sector. This initiative comes amid rising costs associated with Bitcoin mining, as the company seeks ways to diversify its revenue streams. The infrastructure will be leased to Core42, an AI and cloud provider, at TeraWulf’s Lake Mariner facility in upstate New York. This expansion aligns with TeraWulf’s existing Bitcoin mining operations but aims to capitalize on the increasing demand for energy-efficient computing resources.
The deployment of the leased infrastructure will occur in phases between the first and third quarters of 2025. This strategic move is seen as a response to the growing demand for scalable solutions that combine cryptocurrency and AI technologies. By entering the AI space, the company hopes to enhance its long-term earning potential while navigating the challenges presented by escalating Bitcoin mining expenses.
According to recent data, the average cash cost to mine a single Bitcoin has risen 13% to $55,950 in the third quarter of 2024. This significant increase in production costs has led several public Bitcoin miners to lose market share, prompting some to shift focus and allocate more resources toward AI development rather than solely expanding mining capabilities. Amid these industry trends, TeraWulf reported a loss of 6 cents per share in Q3, which was worse than anticipated. Nonetheless, the company might see some positive momentum from Bitcoin ’s substantial price increase of approximately 48% during the same quarter.
Despite facing challenges, TeraWulf’s stock performance has been strong overall in 2024, showing a substantial increase of about 152.6% for the year. The recent announcement and transition into AI could further solidify the company’s position in an evolving market, characterized by the intersection of cryptocurrency mining and artificial intelligence technologies.
