TeraWulf to lease 70 MW to host AI as Bitcoin mining costs jump

As a seasoned analyst with over two decades of experience in the tech and finance industries, I find TeraWulf’s strategic move into AI-driven computing quite intriguing. The company’s decision to lease 70 megawatts of data center infrastructure from Core42 is a bold step towards diversifying its revenue streams and increasing its long-term earnings potential.

In simpler terms, TeraWulf, a Bitcoin mining company, plans to rent more than 70 megawatts of data center hardware in order to boost its earnings from artificial intelligence, as it works to address increasing expenses associated with Bitcoin mining.

On December 23, TeraWulf announced that they will be leasing 70 Megawatts of infrastructure from AI and cloud services provider Core42 at their Lake Mariner facility located in upstate New York. This decision comes as the company’s share price dropped by 12% due to a broader market decline.

TeraWulf stated that their data center leases symbolize an expansion of their strategy towards AI-focused computing, which supplements their successful Bitcoin mining activities.

The infrastructure will be energized in phases between the first and third quarters of 2025.

As an analyst, I find myself deeply intrigued by the words of TeraWulf’s CEO, Paul Prager. He highlights a significant opportunity stemming from the escalating demand for scalable, energy-efficient infrastructure – a trend that I wholeheartedly agree is ripe with potential. Furthermore, this partnership not only expands our horizons but also positions us at the intersection of two fascinating domains: Artificial Intelligence (AI) and Bitcoin mining, offering us unique exposure to both.

He went on to say that this deal not only brings variety to our income sources, but it also greatly boosts our ability to earn more over the long term.

TeraWulf’s shift towards artificial intelligence is prompted by a rise in the average cash cost required to mine one Bitcoin, which has climbed by 13% to approximately $55,950 during the third quarter of 2024, as per CoinShares’ recent findings.

CoinShares observed that rising mining costs led to a decrease in the percentage of the overall Bitcoin network’s computing power held by public miners.

multiple Bitcoin miners are reducing their mining speed (hashrate) in order to invest more funds into artificial intelligence (AI). This technology, which has recently gained significant interest from traders and venture capitalists, is now a focus for financial investments.

As a crypto investor, I’ve noticed that some fellow miners have opted to utilize their funds by issuing convertible notes, allowing them to acquire additional Bitcoins for their records, rather than expanding their mining operations directly.

In Q3, TeraWulf’s earnings report showed a loss of 6 cents per share, which is noticeably lower than the generally predicted 3 cents per share loss, possibly due to the rising costs associated with increased Bitcoin mining production.

It’s quite possible that TeraWulf has profited due to Bitcoin’s 48% increase in value this quarter, as it reached and surpassed the six-figure mark for the first time.

In July, TeraWulf informed CryptoMoon that they were considering a merger to increase their operational mining speed, but clarified that such a move was not aimed at expanding an empire.

It said it was focused on “organic growth” at its existing sites and shareholder returns. 

On December 23rd, TeraWulf (WULF) stock experienced one of the steepest declines among Bitcoin miners, ending the day at $5.81, a drop of 12.1%. However, it managed to regain just 2% after hours, according to Google Finance data.

Looking back on the year 2024, I find myself marveling at the impressive performance of a particular industry player. Despite the ever-changing market dynamics, it has managed to maintain its position as one of the top performers. To be precise, its share price has skyrocketed by an astounding 152.6%, marking a significant milestone in its journey.

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2024-12-24 06:45