TeraWulf pays up to $12 million a megawatt to build AI campuses its tenants don't fund

TeraWulf's▼−5.69% — TeraWulf, down 5.69 percent today turn from bitcoin miner into AI landlord is now an income-statement fact: 83% of third-quarter revenue came from AI leases ²⁵. The number that decides whether shareholders keep any of it came from chief operating officer Naz Khan on November 11 ¹. Building the Justified campus in Hawesville, Kentucky now costs $10–12 million per megawatt, up from $8–10 million at Lake Mariner, its New York campus ¹⁶. The leases are signed. The open question is who pays for the buildings, and at what cost of debt.

Tenants bring the chips, TeraWulf carries the shell

AnthropicPVT$350B — Anthropic, private, latest valuation $350B signed the anchor lease at Justified↗: 20 years, about 401 megawatts, roughly $19 billion ⁵⁶. Under TeraWulf's colocation model the tenant supplies its own chips ⁴. Core Scientific▼−0.70% — Core Scientific, down 0.70 percent today, the other big bitcoin-to-AI conversion, works out to roughly $9.3 million per megawatt on projects leased to CoreWeave▼−8.55% — CoreWeave, down 8.55 percent today, the GPU-cloud company ³. Its contracts let the customer fund up to $1.5 million per megawatt of facility cost and recover it through hosting credits, the backlog accounting we counted in megawatts on November 13 ³. TeraWulf's tenants bring only chips; the shell, and the debt behind it, are TeraWulf's ⁴.

What is signed is funded, the next 250 to 500 megawatts are not

Of 839 contracted megawatts, 102 were billing at quarter-end, and third-quarter adjusted EBITDA was negative $12.8 million ². Management says it can fund the remaining Lake Mariner commitments, the Justified equity and interim letters of credit "all without accessing the equity capital markets" ². That covers what is signed. Contracting 250–500 new megawatts a year, which needs $5–6 billion of cash at the top end against $2.4 billion on hand, is not ¹².

The rent is fixed for 20 years, the bill is not

The Anthropic lease pays roughly $2.4 million per megawatt a year ⁴, the rent line we took apart on November 9. Against Justified's $10–12 million per megawatt to build, a fifth to a quarter of the bill comes back each year, and the rate is fixed for two decades ¹⁴.

Neoclouds such as Nebius▼−12.27% — Nebius, down 12.27 percent today, which own the chips and sell the compute, sign long-term deals at $20–25 million per megawatt, rates that bundle the GPUs' revenue, money TeraWulf's rent never touches ⁴. With rent locked, construction inflation lands on TeraWulf alone. Khan's answer to tenants asking a single-digit yield on cost: "go talk to someone else" ¹.

Two prices will re-rate the stock

Morgan Stanley's November 12 model↗ already charges for the gap: the discount rate on unstabilized signed sites lifted to 9% from 7%, modeled debt coupons of 8.5–12.5%, and a target cut to $47 from $65 with the Overweight rating kept ². Google's credit backstop, signed November 4↗, is there to pull that coupon down; the coupon, the proceeds and the covenants remain open ²⁶⁷.

TeraWulf is timing its financing push for after Anthropic's IPO ¹. Two numbers in that window will re-rate the stock: the rent on the next lease, and the coupon on the first bond.