How a Bitcoin Miner Just Bet Big on Kentucky to Power the AI Boom

TeraWulf, a company better known for mining Bitcoin, has made a decisive move into the AI infrastructure game. The firm closed on a 285-acre greenfield site in eastern Kentucky’s EastPark Industrial Park on May 22, announcing the deal four days later. The location, called the Muskie Data Campus, sits within a 1,000-acre industrial zone and offers room to expand. Total gross power capacity could exceed one gigawatt, with roughly 800 megawatts of net deliverable power. Shares jumped more than 10% on the news, and analysts at Keefe, Bruyette & Woods maintained an Outperform rating and a $33 price target, citing reduced power and transmission risks. The bank sees potential AI leases as early as the first half of 2027.

Construction will happen in phases. The first 500 megawatts should come online in the second half of 2028, with another 500 megawatts targeted for the second half of 2030. Kentucky Power, a subsidiary of American Electric Power, will build a dedicated 345-kilovolt substation tied directly to an existing 765-kilovolt network. That arrangement gives TeraWulf a direct line to large-scale energy without the typical grid bottlenecks. CEO Paul Prager framed the company as a power infrastructure business first, noting that the defining constraint in AI today is access to electricity and transmission.

This isn’t TeraWulf’s first Kentucky play. The company already operates a 480-megawatt brownfield site in Hawesville, a former aluminum smelter with existing energized infrastructure. Fluor Corporation signed on for master planning and preconstruction services in March. Together, the two sites give TeraWulf a combined footprint that serves hyperscalers and AI developers hungry for reliable, scalable compute. Stephen Glagola at KBW expects initial leases for around 400 net megawatts in the first half of next year, which would accelerate revenue from high-performance computing hosting.

The pivot is already showing in the numbers. TeraWulf’s first-quarter revenue hit $34 million, with more than $21 million coming from HPC lease income—a clear shift away from pure Bitcoin mining. Financing remains a challenge, but the company has closed an equity offering and secured revolving credit facilities. Bridge loans and project-level debt backed by future hyperscaler contracts are likely next. The stock has shown volatility but found support on positive AI news. KBW’s $33 target implies substantial upside from current levels.

TeraWulf’s bet is that sites with secured power, utility partnerships, and favorable zoning hold real value in the AI arms race. The company’s zero-carbon emphasis, drawn from nuclear and low-carbon sources at existing operations, could appeal to corporate customers with environmental targets. Success in Kentucky could encourage similar moves across the industry. The market has started to price in that possibility.