TeraWulf CEO Paul Prager Turns Elon Musk’s ‘Stranded Compute’ Warning Into A Buying Pitch

• TeraWulf’s Prager said rivals' stalled projects could become opportunities for well-funded companies.
• Prager said, “What others call stranded assets, we may call a development pipeline.”
• According to Prager, TeraWulf secures power, fixed-price construction contracts, long-term tenants with investment-grade backing and financing before it builds.

TeraWulf Inc. (WULF) CEO Paul Prager pushed back on Elon Musk's warning of "stranded compute" in half-built data centers. Prager said his firm's development strategy insulates it from ventures that fail and might allow it to profit from rivals' misfortunes.

On X, Musk wrote, "We're going to see a lot of stranded compute in partially complete data centers." On Sunday, Prager said that Musk "may be right that we'll see unfinished data centers. But not all developers operate the same way." 

Read Next

Jordi Visser Calls Chamath Palihapitiya’s Bitcoin Going To Zero Tale ‘Completely Just A Joke,’ Says AI Sell-Off Could Bottom In Two Weeks

Anushka Basu

Prager said that TeraWulf gets its electricity from investment-grade utilities at locations where customers have shown interest before. He also said that the company uses guaranteed-maximum-price construction contracts to lock in prices and schedules. It also signs long-term contracts with clients backed by investment-grade credit and gets funds before starting a big building project. "We may move dirt early, but we don't build on spec," he wrote.

Some projects may stall due to "inadequate capital, weak counterparties, execution misses or regulatory hurdles," he predicted. Experienced infrastructure developers with strong balance sheets create opportunity, Prager said. He added, "What others call stranded assets, we may call a development pipeline."

TeraWulf Shares Hit Six-Month Low 

The exchange comes as TeraWulf stock has been under pressure. The stock closed Friday at $11.32, its lowest weekly closing in at least six months, and has lost more than 60% of its value since June. The selloff gained momentum this week with a wide selloff in AI infrastructure firms and huge losses for hedge funds.

TeraWulf also announced changing its business model into data centers for AI and high-performance computing clients. It said it upped its Morgan Stanley-led senior secured revolving credit facility to around $400 million from roughly $250 million on Friday. 

WULF Compute, a subsidiary, raised $3.2 billion in senior secured notes last year to help fund part of the build-out at its Lake Mariner campus in New York.

WULF stock has remained largely flat so far this year. On Stocktwits, retail sentiment around WULF remained in the ‘bullish’ zone, accompanied by ‘high’ chatter levels over the past day. 

Read also: Jordi Visser Calls Chamath Palihapitiya’s Bitcoin Going To Zero Tale ‘Completely Just A Joke,’ Says AI Sell-Off Could Bottom In Two Weeks

For updates and corrections, email newsroom[at]stocktwits[dot]com.