TeraWulf has become the latest cryptocurrency miner to pivot into AI infrastructure hosting, reaching a long-term agreement with Fluidstack that’s backstopped by Alphabet’s Google — in a move expected to significantly increase the company’s revenue run rate.

During its shareholder call on Thursday, the company disclosed that it has signed 10-year colocation lease agreements with Fluidstack, an AI infrastructure provider, worth $3.7 billion in contract revenue. That figure could more than double if five-year extensions are exercised.

Google’s involvement comes through supporting Fluidstack’s $1.8 billion lease obligations with TeraWulf and providing debt financing. In return, Google received warrants for roughly 41 million WULF shares, representing about 8% of the company.

The deal will expand TeraWulf’s data center capacity in New York by more than 200 megawatts of IT load.

“Given the expected improvement in our credit profile, we’ve refined our financing strategy to focus on a series of capital markets initiatives [...] with the benefit of our new financial support from Google and our updated lease agreements,” TerraWulf Chief Financial Officer Patrick Fleury told shareholders. 

TeraWulf, founded in 2021 as a Bitcoin (BTC) mining company focused on environmentally sustainable operations, has faced mounting challenges in the post-halving environment. In the first quarter, the company reported a net loss of $61.4 million alongside a sharp drop in revenue.

Companywide financials improved in the second quarter, as TeraWulf returned to profitability and posted higher revenues compared with the first quarter.

Volatile BTC prices and rising infrastructure costs have made Bitcoin mining economics increasingly difficult, prompting more companies to diversify into AI and high-performance computing to stabilize revenue.

Related: Jack Dorsey’s Block targets 10-year lifecycle for Bitcoin mining rigs

TeraWulf shares surge on AI pivot news

TeraWulf’s latest business deal sparked a sharp rally in its share price on Thursday.

WULF shares jumped as much as 48% intraday to a high of $8.11, with trading volume more than quadrupling the daily average, according to Yahoo Finance data. 

The stock last traded around $7.50, up 37% on the day, giving the company a market capitalization of nearly $3 billion.

The rebound has pushed WULF back into positive territory for the year.

While TeraWulf is pivoting into AI infrastructure, it remains, for now, a crypto proxy stock — a status underscored by its continued mining operations. In the second quarter, the company self-mined 485 BTC, down from 699 in the same period a year earlier.

At the end of Q2, TeraWulf held $90 million in cash, cash equivalents and Bitcoin.

Related: Bitcoin Energy Value metric says ‘fair’ BTC price is as much as $167K