Crypto Miner TeraWulf Bets $3.2 Billion on AI--And It's All Junk

Wall Street's appetite for AI-linked debt just took a speculative turn. TeraWulf WULF, best known for its cryptocurrency mining operations, is stepping into the junk bond market with a $3.2 billion offering to fund a major data center expansion at its Lake Mariner campus in Barker, New York. Morgan Stanley is leading the deal, which could price later this week. For TeraWulf, it marks a debut in high-yield territory and a bet that investors are ready to back smaller, riskier players in the race to build AI infrastructure. Credit agencies are still assessing where to rate the deal, but it's expected to land somewhere in the BB to CCC range typical for speculative-grade debt.

The timing couldn't be more telling. After a flood of investment-grade issuances by tech giantshighlighted by Oracle's $18 billion bond sale last monthAI financing has now trickled down to the riskier corners of credit markets. Investor demand for these deals has been strong, though questions linger over how quickly AI investments will start paying off. Still, the willingness of institutional capital to underwrite this wave suggests that the market could be pricing in long-term faith in AI infrastructure as a new asset class.

TeraWulf's move follows CoreWeave's $1.75 billion junk bond issuance in July, used to support its $9 billion acquisition of Core Scientific. Both transactions point to a broader shift where crypto miners, cloud providers, and hyperscalers are converging on the same goal: scaling AI capacity at speed. As more speculative borrowers step into this arena, the line between high-tech growth and high-yield risk could blur furthersignaling a new phase in the AI debt cycle where the upside may be as large as the leverage behind it.