TeraWulf (NASDAQ: WULF), the U.S.-based Bitcoin miner pivoting into artificial intelligence (AI) infrastructure, is preparing a $3 billion debt raise through Morgan Stanley, supported by tech giant Google. The financing marks a bold step in the company’s transition from a crypto-first business into a hybrid player supplying large-scale AI data centre capacity.

Google Backstops Billions in Debt

Google’s growing commitment to TeraWulf has been central to the miner’s reinvention. In August, the tech giant backstopped $3.2 billion of TeraWulf’s lease obligations in exchange for warrants equivalent to a 14% pro forma equity stake in the company.

The upcoming debt financing, which could take the form of a high-yield bond or leveraged loan, will see Morgan Stanley lead the fundraising. Google’s support is designed to provide creditors with additional security, though credit rating agencies are still weighing whether to grade the debt anywhere between BB and CCC.

Such instruments are typically reserved for companies with heavy leverage and involve heightened risk for lenders. Still, with Google anchoring the deal, investors may view TeraWulf as a rare crossover between legacy crypto mining and the fast-growing AI infrastructure boom.

Fluidstack Agreement Underpins Expansion

The pivot into AI data centres is not merely a future ambition, it is already underpinned by contracts. In August, TeraWulf struck a 10-year colocation lease agreement with AI cloud infrastructure provider Fluidstack, valued at $3.7 billion in contract revenue.

Google also backstopped that agreement, adding to its broader $3.2 billion commitment across TeraWulf’s transformation. The contract ensures long-term demand for the miner’s expanded facilities, giving credibility to its decision to shift capital away from Bitcoin mining and into AI-driven hosting services.

The AI industry’s appetite for power and space is enormous and with severe shortages of GPU chips, reliable electricity access and data centre real estate, Bitcoin miners such as TeraWulf are uniquely positioned. They already hold two of the scarcest resources, existing infrastructure and secured energy capacity.

Stock Swings Highlight Investor Uncertainty

Despite the high-profile backing, TeraWulf’s stock has been volatile. The company’s Beta coefficient ranges between 3.36 and 4.27, underlining its tendency for sharp moves.

Shares surged by over 80% in August following news of Google’s initial backstop. On Thursday, the stock spiked intraday to $11.72 before sliding back to close at $10.97, down 3.7% in after-hours trading. That same day, it had briefly fallen 6.5% during volatile trading.

Still, 2025 has been a strong year overall for WULF. The stock is up 94% year-to-date, reflecting investor optimism that the miner can transform into a major player in the AI-data centre economy.

Balancing Bitcoin and AI

The company’s strategy is not without risks. While its Bitcoin mining arm continues to generate cash flow, the capital-intensive nature of AI infrastructure build-outs leaves TeraWulf juggling debt, construction and operational risks. Delays, cost overruns, or technical difficulties could derail its aggressive expansion.

Nonetheless, if successfully executed, the “spend-big-to-win-big” strategy could leave TeraWulf well-positioned to sign and service multi-billion-dollar contracts for AI hosting.

Interestingly, the move has already influenced peers. On the same day as TeraWulf’s announcement, Cipher Mining unveiled a similar partnership with Fluidstack, supported by Google, which secured a 5.4% equity stake in Cipher alongside a $1.4 billion backstop.

The parallel deals suggest that Google is deliberately targeting Bitcoin miners as a fast-track route to meet soaring AI data centre demand.

Outlook

For TeraWulf, the next few weeks will be crucial. If Morgan Stanley successfully closes the $3 billion debt deal by October, the company will secure the capital it needs to scale rapidly. Google’s backing gives the project credibility, but credit ratings, investor appetite and execution risks remain key hurdles.

Should the transition succeed, TeraWulf could evolve from a mid-tier miner into a heavyweight AI data centre operator. With crypto firms increasingly repositioning toward digital infrastructure, the miner’s journey highlights a broader industry trend: Bitcoin miners are becoming the backbone of the AI boom.