TeraWulf sells $92 million stake in nuclear-powered bitcoin mine to fund AI diversification

Bitcoin BTC +1.04% miner TeraWulf has sold its 25% equity interest in a nuclear-powered bitcoin mining facility for approximately $92 million as it seeks to fund the expansion of high-performance computing and AI data center hosting services.

TeraWulf’s stake in the Nautilus Cryptomine joint venture, located near the Susquehanna nuclear power plant in Pennsylvania, was sold to its partner, a subsidiary of Talen Energy Corporation. Completion of the sale resulted in a 3.4x return on TeraWulf’s investment, the firm reported on Thursday.

The deal consists of $85 million in cash and approximately 30,000 Talen-contributed bitcoin miners and associated equipment valued at $7 million, TeraWulf said. The firm intends to reinvest the capital into construction at its wholly-owned flagship Lake Mariner facility in New York, which is designed for hosting HPC/AI data centers, as well as bitcoin mining operations.

TeraWulf recently completed a 2 MW HPC/AI proof-of-concept project at the Lake Mariner facility, designed to support current and next-generation GPU technology. It is also constructing a 20 MW liquid-cooled colocation building at the site, expected to be operational by the first quarter of 2025.

The decision to monetize its stake in the Nautilus mine comes ahead of the expiration of a power contract and ground lease in June 2027, as the firm aims to take advantage of superior cost efficiency and lower expected future energy prices at Lake Mariner.

“This transaction further aligns TeraWulf’s focus and investments with where we have the most operational efficiency, the greatest growth potential and the best opportunity to drive incremental value for shareholders,” TeraWulf CEO Paul Prager said. “Looking ahead, we are focused on ensuring TeraWulf is best positioned to benefit from the growing demand for HPC/AI by meeting the needs of high-quality customers who are looking for power availability and infrastructure that can meet their substantial requirements over the long term.”

TeraWulf is set to host its third-quarter earnings call on Nov. 12. The company’s stock closed up 8% on Thursday at $4.71 and has risen 61% year-to-date, according to TradingView.

WULF/USD price chart. Image: TradingView .

Bitcoin miner strategies diverge

TeraWulf is among bitcoin mining rivals like IREN and Core Scientific increasingly looking to diversify their operations in favor of AI data centers — hoping to capture a wave of new demand from the emerging sector while dampening the volatility of their exposure to bitcoin.

Despite the AI-diversifiers' outperformance this year, that view is not shared by other pure-play bitcoin miners like CleanSpark, Marathon and Riot, who argue the return on bitcoin mining’s cheaper infrastructure and faster energization is far quicker than AI gestation periods, especially amid a potential bull run. There are also other means of tackling the volatility of their bitcoin inventories via derivatives market hedging strategies.

TeraWulf is currently the sixth-largest public bitcoin miner, with a market cap of $1.8 billion — equivalent to an approximate 7.5% market share among its competitors.