TeraWulf's AI leasing revenue reached 71% of total company revenue, accelerating the datacenter business transition.

TeraWulf (NASDAQ: WULF)'s high-performance-computing leasing business supplied most of its revenue for the first time in the second quarter, marking a turning point in the former bitcoin miner's transformation into an AI data-center operator.

Revenue reached $44.8 million in the three months through June, including $31.9 million from HPC leases. Leasing accounted for approximately 71% of total revenue, according to Wednesday's earnings release.

Overall revenue declined about 6% from $47.6 million a year earlier, when the company relied more heavily on bitcoin production. However, revenue increased 32% from the first quarter of 2026, while HPC lease revenue rose approximately 52% sequentially from $21 million. TeraWulf began recognizing HPC leasing revenue in July 2025, with its first-quarter filing showing 60 megawatts of energized HPC capacity at March 31.

The shifting revenue mix reflects a broader industry trend among bitcoin miners toward hosting artificial-intelligence computing. These operators are leveraging their access to power, land, and grid connections as technology companies compete fiercely for data-center capacity. Long-term leases provide more predictable revenue than bitcoin mining, though they require billions in construction spending and expose operators to delivery deadlines and financing risks.

TeraWulf operated 81 megawatts of revenue-generating critical IT capacity at its Lake Mariner campus in New York at quarter-end. The July completion of its CB-3 building increased capacity to 102 megawatts and triggered conditions for $600 million in Google credit support for Fluidstack's lease obligations.

An additional 336 megawatts are under construction in the CB-4 and CB-5 buildings. The first CB-4 data hall has entered commissioning, with phased delivery and rent commencement planned for the second half of 2026. CB-5 is scheduled for phased delivery beginning in early 2027.

TeraWulf reported construction costs remain within its earlier estimate of $8 million to $10 million per megawatt of critical IT capacity. Regulatory filings note that customer backstops such as Google's support typically become effective only after lease commencement, making timely completion critical for both financing and revenue recognition. Delays beyond specified thresholds may trigger customer termination rights, risks the company detailed in its 2025 annual report.

TeraWulf ended June with approximately $3 billion in cash and restricted cash, compared with $3.1 billion three months prior. Restricted cash is designated for specific projects or obligations and is not necessarily available for general corporate use.

Expansion accelerated after quarter-end. In July, TeraWulf signed a 20-year lease with AI developer Anthropic covering approximately 401 megawatts at the Justified Data Campus in Hawesville, Kentucky. The agreement is estimated to generate $19 billion in revenue during its initial term, with potential additional revenue of up to $33 billion if Anthropic exercises two five-year extensions.

Initial capacity at Justified is expected in the second half of 2027, with full campus delivery targeted for early 2028. The base term averages approximately $950 million in contracted annual revenue, though actual revenue will depend on delivery schedules and lease terms. An SEC filing confirms the lease's duration, capacity, and planned construction phases.

TeraWulf also agreed to sell its entire 50.1% interest in the Abernathy data-center joint venture in Texas for approximately $530 million in cash. Fluidstack, TeraWulf's project partner, leads the buyer group. The proceeds will enable TeraWulf to redirect capital toward campuses where it maintains full control, including the Kentucky developments.

At its Muskie campus in eastern Kentucky, acquired in May, electric-service and infrastructure agreements with Kentucky Power provide up to one gigawatt of capacity. Initial service is expected in the fourth quarter of 2028.

TeraWulf is pursuing another potential gigawatt-scale campus at the Morgantown generating station in Maryland. The Federal Energy Regulatory Commission authorized the proposed acquisition on July 29. The transaction requires remaining regulatory approvals and conditions, with initial data-center operations not expected until 2030.

TeraWulf reaffirmed its target of contracting an additional 250 to 500 megawatts of critical IT capacity annually. Achieving this goal depends on securing power, tenants, and financing while executing the existing construction pipeline on schedule.