Google could take stake in TeraWulf AI project if Anthropic defaults
Google could own part of TeraWulf project if Anthropic defaults
Google has agreed to backstop a $19 billion lease held by Anthropic at a TeraWulf data centre project in Kentucky, according to a filing by TeraWulf.
If Anthropic fails to pay its rent or becomes insolvent, Google could take over the lease. In some cases, Google could pay a termination fee instead and receive an ownership stake in the project company.
The main terms of the deal
- Anthropic's lease runs for 20 years and covers 401 megawatts of computing capacity. A megawatt is a measure of electrical power.
- The deal is intended to help TeraWulf secure financing for the project.
- Google's support starts for each leased section when the final data hall in that section is delivered.
- Deliveries are expected to start in late 2027 and continue through the second quarter of 2028.
How Google could take an ownership stake
Any stake would be in Raylan Data, the TeraWulf subsidiary that operates the project. It would not be a stake in TeraWulf itself, which is publicly traded.
The size of the stake would depend on the termination fee paid. The filing divides that fee by the total cost of developing and building the facility, including land, infrastructure, equipment and financing. For example, a payment equal to 30% of the total cost would give Google a 30% stake, according to the report.
For the first six years after Google's support takes effect, Google generally has to take over the lease rather than end it. One exception is if Google's TPU pods, its own AI chips installed in the halls, can use less than half of the power set aside for the tenant.
Google's obligations would end if Anthropic, or its parent or a subsidiary, holds an investment-grade credit rating for at least three months.
TeraWulf's shift from bitcoin mining to AI
TeraWulf built its business around bitcoin mining. A bitcoin miner is a company that uses computing power to support the Bitcoin network and earn new bitcoin.
The company has been moving toward supplying power and infrastructure for AI companies. The Anthropic agreement is described as one of the largest contracts in that shift.
The agreements were signed on Nov. 4, TeraWulf said in a Wednesday filing reported by CoinDesk.
Sources
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