AI’s insatiable demand for energy prompts crypto miners to transform $3 billion worth of data centers, supported by Google

TeraWulf Inc., a cryptocurrency mining company based in the United States, has revealed plans to secure $3 billion in debt financing to grow its data center footprint, with financial support from

. The financing, organized by Morgan Stanley, could be launched as soon as October 2025, utilizing either high-yield bonds or leveraged loans. As part of the arrangement, Google has pledged a $3.2 billion backstop, raising its ownership in from 8% to 14% title1 [ 1 ]. The capital will help TeraWulf take advantage of the soaring need for data center space, GPU hardware, and reliable energy in the AI sector, allowing the company to adapt its energy-heavy infrastructure for AI processing title2 [ 2 ].

The upcoming debt offering, which is expected to be rated between BB and CCC, could receive a ratings boost due to Google’s backing, potentially achieving a higher grade than is typical for speculative-grade debt title1 [ 1 ]. Credit rating agencies are currently reviewing the proposal, with final terms still being finalized title2 [ 2 ]. Thanks to Google’s support, TeraWulf has also expanded its partnership with Fluidstack, an AI cloud services provider, which agreed in August to a $3.7 billion colocation contract for TeraWulf’s New York data centers title3 [ 3 ]. This collaboration highlights the increasing overlap between crypto mining infrastructure and AI development, as companies with substantial power resources become vital players in the AI competition title4 [ 4 ].

This strategic pivot mirrors broader shifts in the industry. With AI demand surpassing available resources, crypto mining firms such as TeraWulf are repositioning themselves as infrastructure suppliers. TeraWulf’s recent $850 million convertible bond issuance in August, also led by Morgan Stanley, demonstrates its aggressive approach to raising capital title1 [ 1 ]. Likewise, Cipher Mining Inc. has entered a similar arrangement with Fluidstack and Google, with Google providing a $1.4 billion backstop and acquiring a 5.4% equity interest title5 [ 5 ]. These developments indicate a sector-wide move toward AI-focused revenue, reducing dependence on the volatility of cryptocurrency prices title6 [ 6 ].

Morgan Stanley has taken a leading role in facilitating this industry transformation. The bank has managed over $1.65 billion in convertible bond deals for both TeraWulf and Cipher Mining in recent months, including an $800 million transaction for Cipher this week title7 [ 7 ]. This involvement highlights the growing intersection of traditional financial institutions and crypto-based infrastructure, as major investors look to profit from energy-intensive assets in the age of AI title8 [ 8 ].

TeraWulf’s growth strategy also features a $400 million private issuance of convertible senior notes maturing in 2031, with proceeds earmarked for capped call transactions and expanding data center operations title9 [ 9 ]. Experts suggest that the $3 billion debt raise could rank among the largest financing efforts by a crypto miner shifting toward AI infrastructure, reflecting Google’s calculated investment in scalable computing resources title10 [ 10 ]. The company’s stock has climbed 94% so far this year, with recent fluctuations tied to investor responses to the debt news title11 [ 11 ].

The implications for the AI sector are substantial. By utilizing their existing data center assets, crypto miners are helping to resolve key challenges in AI development, such as energy supply and computational power title12 [ 12 ]. This momentum is likely to build as technology leaders like Google continue to underwrite major infrastructure projects, creating a cycle where crypto companies gain funding and AI firms secure essential long-term computing capabilities title13 [ 13 ].