TeraWulf secures $19bn Anthropic AI lease, exits Bitcoin

TeraWulf has signed a 20-year, $19 billion lease with Anthropic to host AI computing at a new facility in Kentucky. The contract value alone surpasses TeraWulf's current market capitalization, immediately altering the company's financial profile. CEO Paul Prager said Anthropic selected TeraWulf through a rigorous competitive bidding process, prioritizing access to reliable grid power and long-term infrastructure over competing proposals.

The agreement effectively completes TeraWulf's transition from a Bitcoin miner into an AI infrastructure provider. "We're not involved in Bitcoin," Prager said, rejecting the cryptocurrency's commodity-driven revenue model in favor of the predictable, long-term cash flows generated by AI hosting. The company initially entered crypto mining simply to utilize its flexible power assets, but Prager now views AI infrastructure as the natural end point for the business.

Funding this transformation requires strict capital discipline. TeraWulf recently sold its interest in the Abernathy project, generating a strong return that it plans to reinvest entirely into wholly owned AI sites in eastern Kentucky. By retaining ownership of the land, power supply, and operations, TeraWulf aims to maintain direct control over customer relationships and capture higher long-term returns rather than acting as a passive lessor.

Execution risks remain, particularly around construction timelines. The Kentucky facility is expected to come online beginning in 2028, with Fluor contracted to manage the build. Prager noted that securing skilled labor and specialized contractors has become a more critical bottleneck than acquiring AI hardware, as hyperscale data centers require increasingly complex electrical and cooling systems. The new lease builds on an existing commercial relationship, as TeraWulf already operates Anthropic and Google workloads at its Lake Mariner campus in New York.

Looking at the broader sector, Prager warned that the AI infrastructure boom is fundamentally constrained by electricity quality rather than available real estate. "Not all megawatts are created equally," he said, stressing that viable AI campuses depend on reliable generation, redundant transmission, and supportive local regulation. To address the national power shortage, TeraWulf is focusing on redeveloping former industrial sites and integrating new power generation capacity to serve both its AI tenants and the surrounding electric grid.