TLDR
- TeraWulf stock traded about 3% lower in premarket action on Wednesday.
- Google agreed to backstop Anthropic’s 20-year, $19 billion lease at the Kentucky campus.
- If Anthropic defaults, Google can take over the lease or buy a stake in the project subsidiary.
- TeraWulf also expanded its agreement with Fluor Enterprises for the Hawesville build.
- Google’s support starts section by section, with deliveries running through the second quarter of 2028.
TeraWulf (WULF) stock traded about 3% lower in premarket action on Wednesday. The pullback came as AI data-center names slid on worries about tighter regulation after Democrats won control of Congress.
The company still had a deal to show off. Google agreed to backstop Anthropic’s lease at TeraWulf’s Kentucky campus.
The lease runs 20 years and is expected to bring in about $19 billion in contracted revenue. TeraWulf signed it with Anthropic in July.
TeraWulf also expanded its agreement with Fluor Enterprises. The construction and engineering firm will help build the Hawesville site.
The campus is set to support about 401 megawatts of critical IT load. First capacity is expected online in the second half of 2027.
Why Lenders Care About Google’s Name
The backstop is a credit agreement meant to support financing for the project. TeraWulf filed the details on Wednesday, and the agreements are dated Nov. 4.
CFO Patrick Fleury said strong investment-grade credit support strengthens the project’s financing profile. He added that it helps the company pursue competitive long-term debt.
Reuters called the deal the latest example of big tech firms giving multi-billion-dollar backstops to smaller AI players. Those include neoclouds and data-center developers.
Google’s support does not switch on all at once. The campus has three leased sections, and support for each begins once the final data hall in that section is delivered.
TeraWulf expects those deliveries to run through the second quarter of 2028.
What Happens If the Rent Stops
If Anthropic defaults or becomes insolvent, Google can step in as tenant and take over the lease. Under certain conditions, it can instead pay a termination fee and take an ownership stake.
That stake would be in Raylan Data, the TeraWulf subsidiary running the project. It would not be a stake in publicly traded TeraWulf.
The stake size follows a simple formula. The termination fee is divided by the total cost of the build, which covers land, infrastructure, equipment and financing.
A fee equal to 30% of total cost would give Google 30% of the subsidiary. Pretty easy math.
For the first six years after support takes effect, Google generally has to take over the lease rather than end it. The exception is if Google’s TPU pods in the halls can use less than half the power set aside for the tenant.
Google’s obligations end if Anthropic, or a parent or subsidiary, holds an investment-grade credit rating for at least three months.
