Crypto mining company TeraWulf has announced plans to raise $500 million through a convertible note offering to help finance the construction of a new data center campus in Abernathy, Texas. The private offering is aimed at qualified institutional buyers, the company announced on Wednesday. It also granted underwriters the option to purchase an additional $75 million in notes within 13 days of issuance, depending on market conditions.
The convertible senior notes, due on May 1, 2032, will carry no regular interest, with conversion available only under specific conditions before February 2032. Investors will have the option to convert the notes into cash, TeraWulf shares, or a combination of both, with pricing and conversion terms to be determined through final negotiation. TeraWulf said proceeds from the raise will go toward funding the Texas data center project and for general corporate purposes.
TeraWulf Pivots Toward AI Infrastructure
The new offering follows recent reports that TeraWulf is working with Morgan Stanley to raise up to $3 billion in debt financing, with Google providing a $1.4 billion backstop, to expand the firm’s AI-ready facilities and strengthen its role in powering next-generation computing. In August, TeraWulf also inked a $3.7 billion hosting deal with AI infrastructure firm Fluidstack, backed by Google, which acquired a 14% stake in the miner.
The push by TeraWulf comes as the AI boom has created severe shortages of data center space, GPU chips and reliable electricity access. Large crypto mining companies are well-positioned to capitalize on this boom as they already possess existing data center infrastructure and secured power capacity.
Industry Trend: AI Data Center Expansion
This strategic shift by TeraWulf mirrors broader industry trends, where companies with existing infrastructure are pivoting to meet the burgeoning demand for AI computing power. The need for specialized data centers capable of supporting high-performance computing and AI workloads has become a significant market opportunity.
Galaxy Digital Secures Significant Funding for Texas AI Data Center
Earlier this month, Mike Novogratz’s Galaxy Digital raised $460 million from one of the world’s largest asset managers to expand its Helios AI data center campus in Texas. The deal, involving the purchase of 12.77 million Class A shares at $36 each, aims to deliver 133 megawatts of IT capacity by early 2026.
The funding builds on Galaxy’s $1.4 billion loan secured in August to finance 80% of the Helios buildout. Under a 15-year agreement with CoreWeave, Galaxy will supply compute power for AI and high-performance computing workloads, generating an estimated $1 billion in annual revenue.