TeraWulf Inc., a US-based crypto mining firm, is preparing to raise about $3 billion to fund the expansion of its data centres, with Google Inc. backing the transaction.

The deal, arranged by Morgan Stanley, is expected to be launched in October through either the high-yield bond or leveraged loan markets.

The development comes at a time when demand for artificial intelligence infrastructure has created a shortage of data-centre space, GPU chips, and reliable electricity supply.

Crypto miners, with existing power-intensive facilities, are emerging as key partners for tech companies seeking scalable AI solutions.

Patrick Fleury, TeraWulf’s finance chief, confirmed that credit rating firms are currently assessing the deal, which is expected to be rated between BB and CCC, categories typical of junk-rated debt.

Google is expected to provide a backstop that could boost the creditworthiness of the planned issuance.

In August, Google added a $1.4 billion incremental backstop to its commitments, increasing its overall support to $3.2 billion.

The move also lifted Google’s equity stake in TeraWulf from 8% to 14%.

The deal follows TeraWulf’s $850 million convertible bond sale in August, also arranged by Morgan Stanley.

While terms are still under negotiation, the financing is designed to give TeraWulf the capital needed to expand its data centres for AI clients.

A recent example includes Fluidstack, an AI cloud platform, which expanded its use of a TeraWulf-operated facility in New York.

Alongside TeraWulf, Cipher Mining Inc. has also entered into agreements linked to the same AI infrastructure push. This week, Cipher announced a colocation deal with Fluidstack, under which it will provide data-centre capacity.

Google is backing Cipher as well, with a commitment to underwrite $1.4 billion of Fluidstack obligations and take an equity stake in the company.

Cipher is expected to raise additional debt in capital markets to support these commitments. Like with TeraWulf, Morgan Stanley is serving as financial adviser to Cipher and is likely to lead its future debt offering.

Earlier this week, Morgan Stanley arranged an $800 million convertible bond sale for Cipher, shortly after handling TeraWulf’s $850 million bond deal.

The AI boom has intensified the search for facilities that can handle high electricity needs and advanced processing. Crypto miners, who already operate energy-hungry data centres, are increasingly being seen as partners for AI expansion.

This shift is drawing large technology companies, including Google, to secure agreements that ensure capacity and financing support.

Both TeraWulf and Cipher are adjusting their business models to capture this demand.

While traditionally dependent on cryptocurrency revenues, they are now entering agreements with AI platforms such as Fluidstack, highlighting a diversification strategy tied to artificial intelligence growth.

Morgan Stanley has emerged as a central player in arranging financing for crypto miners repositioning as AI infrastructure providers.

The investment bank has helped facilitate convertible bond sales worth $1.65 billion in recent months for TeraWulf and Cipher.

With Google’s financial backing and equity participation, both firms are expected to proceed with significant debt market activity in the coming months.

Although details of the upcoming $3 billion debt raise are still under discussion, the combination of crypto mining capacity, AI demand, and tech sector backing signals a major development in the transformation of energy-intensive data centres.

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