Google Becomes Major Stakeholder in Terawulf
Google has stepped up as the largest shareholder of Terawulf, holding a 14% share after trading for additional shares in return for enhancing lease agreements with Bitcoin miner and AI infrastructure provider FluidStack.
On Thursday, Terawulf announced a decade-long colocation lease with FluidStack, which includes Google backing the lease obligations via a financial guarantee known as a backstop. In exchange, Google receives a warrant to purchase shares.
Kerri Langlais, Terawulf’s Chief Strategy Officer, mentioned in a conversation with Cointelegraph that the backstop in Google’s contract amounts to $3.2 billion, which allows Google to acquire over 73 million shares, encompassing that 14% ownership in Terawulf.
She emphasized that this makes Terawulf Google’s largest shareholder, indicating strong confidence from a leading global tech firm and underscoring the value of their zero-carbon infrastructure as well as future potential opportunities.
Financial Backstop Supports Deal
Following the agreement, FluidStack shared its intent to expand operations at the Lake Mariner Data Center Campus in Terawulf, New York, set to begin in late 2026.
Langlais explained that this financial backing guarantees FluidStack’s long-term lease commitment at Lake Mariner. If AI companies default on their obligations, Google would step in with that $3.2 billion.
However, she clarified, “This isn’t a guarantee for Terawulf’s corporate debt, and we won’t have access to these funds.”
“The backstop relates to the lease revenues for AI and high-power computing and is not connected to Bitcoin mining activities.”
Future Plans for Bitcoin Mining
In light of recent changes, Bitcoin miners are adapting by diversifying into AI and high-power computing hosting services, especially after the recent halving of mining rewards to 3.125 BTC in April 2024.
Langlais stated that while Terawulf will continue to operate at the Lake Mariner Bitcoin mining site, they don’t have plans for expansion right now. The focus is more on “execution: construction, hosting, and partnerships.”
“In the near term, mining contributes valuable resources to the electrical grid, generating cash flow and allowing for quick adjustments to maintain stability,”
she added. However, looking ahead, the company values the transition towards AI and HPC workloads more. Long-term contracts with blue-chip partners like FluidStack and Google are expected to drive growth and create value.
A report from asset manager VanEck mentioned that if a mining company redirected 20% of its energy capacity to AI and HPC by 2027, it could see annual profits increase significantly.
Terawulf anticipates that its agreement with FluidStack could generate up to $6.7 billion in revenue, potentially reaching $16 billion with lease extensions.
Terawulf’s Stock Performance
During Monday trading, Terawulf stock (WULF) surged to $10.57, marking a 17% increase from the previous close of $8.97.
But by the session’s end, the stock settled at $9.38, reflecting a loss of 1.28% after hours. This upswing followed the announcement of the agreement with FluidStack, resulting in a 72% rise in shares over just five days.
