TeraWulf has completed the sale of a 25% stake in its Nautilus Cryptomine joint venture for approximately $92 million, a move aimed at financing the company's expansion into high-performance computing (HPC) and artificial intelligence (AI) data center hosting services.

The stake was purchased by a subsidiary of Talen Energy Corporation, resulting in a return of 3.4 times TeraWulf’s initial investment, as reported by the firm on Thursday.

The deal includes $85 million in cash and around 30,000 bitcoin miners, valued at $7 million, contributed by Talen. TeraWulf plans to reinvest these funds into its Lake Mariner facility in New York, which is designed for both bitcoin mining and HPC/AI operations.

The facility recently completed a 2 MW HPC/AI proof-of-concept project and is constructing a 20 MW liquid-cooled colocation building expected to be operational by the first quarter of 2025.

This strategic decision to liquidate a stake in the Nautilus mine aligns with TeraWulf’s goal to capitalize on lower energy costs anticipated at Lake Mariner, especially ahead of the expiration of a power contract and ground lease in June 2027.

The company aims to position itself to meet growing demands in the AI sector by providing reliable power availability and infrastructure.

TeraWulf is currently the sixth-largest public bitcoin miner, holding a market cap of approximately $1.8 billion, which accounts for about 7.5% of the market share among its competitors. The company’s stock rose by 8% to $4.71 on Thursday and has seen a 61% increase year-to-date.

As the market for bitcoin mining evolves, TeraWulf joins other companies like IREN and Core Scientific in diversifying their operations toward AI, despite contrasting strategies from traditional bitcoin miners who emphasize the faster returns of bitcoin mining infrastructure.

TeraWulf is set to host its third-quarter earnings call on November 12.