TeraWulf Secures $3.5 Billion Loan for Kentucky AI Campus

What happened

TeraWulf secured $3.5 billion in debt financing to fund construction of its Justified Data campus in Hawesville, Kentucky. Morgan Stanley is leading the transaction, which combines leveraged loans and high-yield bonds and represents the company's first entry into the leveraged loan market. The financing supports a 20-year lease agreement with Anthropic covering approximately 401 megawatts of critical IT capacity. The lease is expected to generate around $19 billion in contracted revenue over its initial term. Capacity is scheduled to come online in the second half of 2027, with full deployment targeted for early 2028. This follows previous debt raises of $1.3 billion in December and $3.2 billion in October, as TeraWulf shifts its business model from Bitcoin mining to AI data center infrastructure.

Why it matters

The financing represents a strategic pivot for TeraWulf away from cryptocurrency mining toward long-duration AI infrastructure revenue. The $19 billion Anthropic contract provides visibility into future cash flows and validates the company's ability to leverage its power access and site development capabilities for AI customers. However, the $3.5 billion leveraged loan significantly changes TeraWulf's capital structure and introduces execution risk tied to completing the Kentucky buildout on schedule. The deal pairs higher leverage with an investment-grade style contract, which may appeal to lenders seeking predictable returns. Success in converting this financing into operational AI infrastructure will be critical for the company's next growth phase and investor confidence in its transition strategy.

Bigger picture

TeraWulf's shift mirrors a broader trend among Bitcoin miners repurposing infrastructure for AI workloads as demand for computing capacity surges. The company is among the first cryptocurrency miners to access high-yield bond markets and now the leveraged loan market, reflecting investor appetite for AI infrastructure plays. The Anthropic partnership highlights how AI companies are securing long-term capacity commitments to support model training and deployment. TeraWulf's financing strategy and lease structure also face scrutiny over insider stock sales, maintenance cost assumptions, and the sustainability of its growth model, according to industry analysts and short-sellers.

What to watch

Monitor construction progress at the Justified Data campus and whether TeraWulf meets its second-half 2027 target for initial operations. Track the company's ability to manage its expanded debt load and deliver on the 401 MW buildout by early 2028. Watch for additional AI customer announcements or lease expansions at the Kentucky site. Pay attention to how TeraWulf balances its remaining Bitcoin mining operations with its growing AI infrastructure focus, and whether it pursues further asset sales like the Texas data center stake. Analyst commentary on execution risk and capital structure will also be key.