By Nate Wolf

Big names like Oracle and OpenAI aren't the only ones securing billions of dollars in funding for artificial intelligence. Mid-cap players are mortgaging chunks of their businesses to get in on the action, too.

TeraWulf, the data-center operator best known for its Bitcoin mining facilities, plans to offer $3.2 billion in senior secured notes due in 2030 in a private offering, the company announced Tuesday. It will use the proceeds to finance a portion of its Lake Mariner data-center campus in upstate New York. TeraWulf didn't immediately respond to requests for further comment.

Shares were rising 11% Tuesday, having climbed more than 170% this year.

TeraWulf has been on a tear since August, when Alphabet's Google invested in the company as part of a complex AI hosting arrangement. AI cloud platform Fluidstack will pay $6.7 billion to lease facilities at Lake Mariner, with Google agreeing to backstop $3.2 billion of Fluidstack's obligations. In return, Google received warrants to acquire 32.5 million TeraWulf shares, giving it a 14% ownership stake.

But completing a data center is pricey, as investors have learned again and again over the past year.

TeraWulf's $3.2 billion bond offering represents more than half of its $5.7 billion market capitalization. Among transactions of more than $2 billion, the deal would be the largest bond issuance as a proportion of public market cap in 2025, according to Dow Jones Market Data.

Pricing information wasn't available yet, but the bonds could be a high-yield play for institutional investors. Credit rating firms were debating where to place the transaction within the BB to CCC range usually deemed junk bonds, according to a Bloomberg report from last month about the potential offering. Google's involvement may provide some security, though. Its safety net for the Fluidstack deal notably is the same size as the bond offering.

Plenty of investors are betting on TeraWulf's downfall, too. About 44% of its shares are sold short, according to FactSet. For peers IREN and Nebius Group, that number is 17% and 13%, respectively.

Write to Nate Wolf at nate.wolf@barrons.com

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October 14, 2025 13:36 ET (17:36 GMT)

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