TeraWulf Slides 5% Despite Doubling Muskie Power Contract to 1 Gigawatt; Core Scientific Drops 3%, Riot Eases

A bigger power contract usually reads as good news for a company selling artificial intelligence (AI) data center capacity, yet TeraWulf (NASDAQ:WULF) is heading the other way after doubling the electric supply at its Muskie campus in Kentucky. TeraWulf stock is down 5% to $14.77 in morning trading, even after Kentucky Power agreed to lift contracted demand at Muskie to 1 gigawatt. The reaction offers a read on how the market is pricing the entire AI hosting group.

Meanwhile, Core Scientific (NASDAQ:CORZ) stock is down 3%, sliding alongside TeraWulf as another former crypto miner that now leases capacity to AI customers. Riot Platforms (NASDAQ:RIOT | RIOT Price Prediction) stock is down 2%, the mildest decline among the three companies making that same pivot.

At the same time, the Global X Data Center & Digital Infrastructure ETF (NASDAQ:DTCR), a gauge of the broader data center trade, is down 0.3%. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.2%, which places the selling squarely in this corner of the market. That divergence keeps the focus on former miners now selling power and space to AI developers.

Kentucky Power Doubles Muskie to 1 Gigawatt

Kentucky Power and TeraWulf finalized an amended agreement that doubles contracted electric demand at the Muskie data campus in Grayson, Kentucky, to 1 gigawatt. The new terms also pull delivery of the campus’s second phase forward by a year. Paul Prager, TeraWulf’s chairman and chief executive officer, stated that expanding contracted power and bringing the second phase forward positions the company to meet strong customer demand.

TeraWulf’s bull case rests on contracted power being the scarce input in the AI buildout, so doubling it at Muskie directly expands what the company has to sell. Muskie also sits in the same state as TeraWulf’s Justified campus, where the company signed a long-term lease with Anthropic. A Colorado legislative staff report notes that a single operating data center can draw over a gigawatt, and it cites Lawrence Berkeley National Laboratory projections that data centers could account for between 6.7% and 12% of U.S. electricity use by 2028.

Regulatory Approval and Long Timelines Weigh on TeraWulf

The complication for TeraWulf is timing. Both changes in the amended agreement depend on approval from the Kentucky Public Service Commission, so the added capacity exists on paper until regulators sign off. TeraWulf had previously targeted initial service at Muskie for the fourth quarter of 2028, which puts the revenue years away while the cost of building toward it arrives much sooner.

Even with the pullback, TeraWulf shares remain up 28% year to date, a gain built on enthusiasm for the company’s AI infrastructure push. That cushion leaves room for profit-taking whenever the payoff from new capacity sits years out. With a beta of 4.25, TeraWulf stock has historically moved far more sharply than the broad market, which magnifies swings in both directions.

Core Scientific and Riot Slide With the Group

Core Scientific runs a similar playbook, converting former crypto mining sites into colocation space, meaning powered data center floor rented to AI and cloud customers (we profiled seven of these picks-and-shovels suppliers to the AI buildout, from power to cooling, in a free report you can grab here). The parallel decline in Core Scientific and TeraWulf points to pressure on the cohort as a whole, since both companies sell the same scarce commodity of energized capacity.

Riot has made the same pivot, signing a 20-year data center lease with a leading frontier AI lab while still operating its mining business. With the smallest drop of the three, Riot shows the selling reaching the group with varying force. That pattern, paired with a softer data center fund and a firmer S&P 500 fund, frames the TeraWulf stock decline as part of a sector-wide pullback.

What to Watch Next

The next clear marker for TeraWulf is the Kentucky Public Service Commission’s decision on the amended agreement, which would lock in both the doubled capacity and the earlier second phase. Traders can watch for that ruling, along with signs that selling in Core Scientific and Riot is easing. Any construction update from TeraWulf on Muskie’s timeline could also shape how quickly the market credits the added capacity.

TeraWulf stock offers real upside potential if contracted power keeps commanding a premium, but the Muskie expansion still needs a regulator’s approval and is likely years from producing revenue. Investors weighing their exposure should calibrate their holdings carefully given that gap between contract and delivery. For TeraWulf’s shareholders, keeping their stakes moderately sized makes sense until the commission rules and the group selling settles.

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