TeraWulf Signs $19B Data Center Lease with Anthropic

What happened

TeraWulf announced a 20-year lease agreement with Anthropic, the California-based AI company behind the Claude platform, for a data center campus at the site of a former aluminum smelter in Hawesville, Kentucky. The agreement covers approximately 401 MW of critical IT load capacity to support high-performance computing operations. Capacity will be delivered in phases, with the first tranche expected online in the second half of 2027 and full 401 MW capacity by early 2028. The deal includes two successive five-year renewal options for Anthropic. TeraWulf expects the lease to generate approximately $19 billion in contracted revenue over the initial 20-year term. In a separate transaction, TeraWulf announced the sale of its 50.1% stake in the Abernathy Joint Venture, a 168 MW data center campus under development in Texas, to an investor group led by joint venture partner Fluidstack for approximately $530 million. The company invested approximately $450 million in that project.

Why it matters

This deal represents a major milestone for TeraWulf's strategic pivot from cryptocurrency mining to AI data center infrastructure. The $19 billion revenue contract provides significant long-term cash flow visibility and validates the company's ability to secure major hyperscale customers. The agreement comes earlier than management's previous guidance of securing a major customer by the end of the second quarter of 2026. The Anthropic lease establishes TeraWulf as a significant player in the rapidly growing AI infrastructure market, particularly as demand for high-performance computing capacity continues to surge. The sale of the Texas joint venture stake for $530 million allows TeraWulf to redeploy capital into projects where it maintains direct ownership and operational control, aligning with its strategy to focus on wholly owned data center opportunities.

Bigger picture

The agreement reflects the massive capital flowing into AI infrastructure as companies race to secure computing capacity for artificial intelligence operations. Anthropic, recently valued at nearly $1 trillion, represents one of the world's leading AI companies, and its long-term commitment signals confidence in Kentucky as an emerging data center market. The project will involve approximately $4 billion in development investment from TeraWulf, plus an estimated $10 billion or more from the tenant. The data center is expected to contribute approximately $14.5 million per year in state sales tax and $7 million in annual school tax contributions to Hancock County. However, the project has faced community pushback over concerns about infrastructure strain and environmental impact, with a petition to pause the project garnering more than 1,200 signatures. Big Rivers Electric Corp., the local utility, has structured an electric service agreement designed to ensure TeraWulf bears all identified risks and costs associated with obtaining and delivering the necessary power. TeraWulf is also developing another data center in Eastern Kentucky near Ashland, though no tenant has been announced for that project.

What to watch

Key milestones include the first $250 million payment from the Abernathy sale within 14 days of signing, followed by $150 million by December 31, 2026, and approximately $130 million by April 30, 2027. Watch for progress on the Kentucky campus development, particularly the timeline for delivering the first capacity tranche in the second half of 2027. Monitor how TeraWulf redeploys the Abernathy proceeds into new wholly owned data center opportunities. Also watch for potential tenant announcements for the Eastern Kentucky facility near Ashland, and how the company navigates community concerns and regulatory processes for its Kentucky projects. Any updates on power supply agreements with Big Rivers Electric Corp. will be important indicators of project progress.