TL;DR · 30-second read

The Short Version

TeraWulf, a company that turns old industrial sites into giant computer warehouses for artificial intelligence, has doubled the electricity reserved for its new Kentucky campus, to about what a large nuclear power plant produces.

It wants the second half switched on in 2029, a year early. But that date is not its to set. State regulators must sign off, and the local utility must finish building the equipment that delivers the power.

No tenant has been named yet. TeraWulf is also borrowing more to back financial guarantees for the utility, which are meant to protect ordinary electricity customers if the project falls short.

TeraWulf has doubled contracted power at its Muskie Data Campus in eastern Kentucky from 500 megawatts (MW) to 1 gigawatt (GW). In an 8-K filed October 5, 2026, the company said its subsidiary DB Long Hunts Data LLC executed amended and restated transmission infrastructure and energy service agreements with Kentucky Power, an American Electric Power (AEP) company, on October 1. The amendment moves delivery of the campus’s second 500 MW phase from 2030 to 2029, subject to Kentucky Public Service Commission (PSC) approval and Kentucky Power’s construction schedule. The first 500 MW phase is still targeted to begin ramping in 2028.

Data Center Dynamics reported that the roughly 285-acre site, bought in May 2026 from Industrial Equity Partners, sits within the 1,000-acre EastPark Industrial Park and is zoned for data center use. It also reported that Core42 and Fluidstack are live customers at TeraWulf’s Lake Mariner campus in New York, and that Anthropic is set to lease capacity at the company’s separate 480 MW Justified Data Campus in Hancock County, Kentucky.

Executive Summary

TeraWulf now holds a contract for 1 GW of utility power at Muskie, a site it bought five months ago. It is pitching the campus to prospective tenants for artificial intelligence and high-performance computing (HPC), meaning dense clusters of servers for training and running AI models. The deal has two phases of 500 MW each: the first is targeted to begin ramping in 2028, and the second has been pulled forward a year to 2029. Kentucky Power is building a 765-kV/345-kV substation, the extra-high-voltage hub that will feed the site, and TeraWulf says it is evaluating whether the campus could eventually support up to 2 GW.

The headline number is real and contractual. The accelerated date is not yet in TeraWulf’s hands. Both the company’s press release and its 8-K make 2029 conditional on a state regulator’s approval and on the utility’s construction schedule. The same 8-K discloses a second dependency: TeraWulf intends to upsize its senior secured revolving credit facility and raise more senior secured debt to cover letter-of-credit needs tied to its utility power partnerships, and it notes there is no assurance that financing will be obtained.

For AI tenants, Muskie offers a credible path to gigawatt-scale power in a market where power is the scarcest input. For investors, the announcement shows where the next phase of execution risk sits: with the regulator, the utility and TeraWulf’s credit capacity, more than with construction of the data halls themselves.

The 2029 Date Belongs to the Utility and the Regulator

A data center developer can buy land, pour foundations and order chillers on its own schedule. It cannot energize a campus until the utility has built the substation and transmission connections to deliver the power. At Muskie, that work falls to Kentucky Power, which is developing a 765-kV/345-kV substation tied to the regional transmission network. Lines at 765 kV are the heaviest-duty class in common use on the US grid, built to move very large blocks of power. A substation at that voltage is a major utility construction project in its own right.

TeraWulf’s filings are precise about what that means for the second phase. Delivery of the second 500 MW in 2029 is “subject to Kentucky Public Service Commission approval and Kentucky Power’s construction schedule.” The press release adds that development will proceed consistent with Governor Beshear’s Executive Order 2026-494 on data center development. The 2029 date is therefore a target the developer has negotiated, not one it controls. The first phase’s 2028 target carries no new conditions in the release, but it rests on the same utility-built infrastructure.

This matters most to whoever eventually signs a lease for the second 500 MW. An AI company that plans a 2029 deployment on Muskie is effectively planning around a PSC docket and a utility construction calendar. TeraWulf’s CEO, Paul Prager, framed the acceleration as giving the company “greater flexibility to meet prospective customers’ deployment needs.” That is a fair description of the upside. The flexibility runs only as fast as the regulatory and construction steps outside TeraWulf’s control.

Contracted Power Is the Product Being Sold

Prager said customer interest in Muskie “has been tremendous, and power availability is central to those conversations.” That ordering is the business model. TeraWulf is securing power first and tenants second, on the view that a signed utility contract for 1 GW is what gets a large AI customer to the table. The company has a track record of converting sites this way: per its own description, it is repurposing parts of its Lake Mariner bitcoin-mining campus in New York for contracted HPC use, and its Justified campus already has Anthropic lined up as a tenant.

The customer claim for Muskie itself is unquantified, however. The release names no tenant, letter of intent or lease terms for the campus, and “tremendous” interest is not contracted demand. TeraWulf’s own risk factors list its “ability to attract additional customers to lease its HPC data centers” first among the uncertainties. Until a lease is announced, Muskie is a power-backed site with a strong pitch rather than a revenue-generating campus.

The Collateral Behind the Megawatts

The part of the October 5 filing most likely to matter to investors sits under a separate heading: a “Financing Strategy Update.” TeraWulf said it intends to increase its existing senior secured revolving credit facility and seek additional senior secured debt “to further support letter of credit needs in connection with the Company’s long-term power development partnerships with utilities.” A letter of credit is a bank’s guarantee that the utility can draw on if the customer fails to pay or walks away. In practice it ties up borrowing capacity before a single server is installed.

The release frames this as deliberate. TeraWulf describes its Kentucky approach as coordinating with the utility on infrastructure, providing “financial protections for utility investment” and structuring agreements “to benefit existing customers.” That approach has a precedent. In August, the Kentucky PSC approved the separate electric service agreement for the Justified campus in Hawesville, finding its terms adequately protected existing customers and appropriately allocated the costs and risks of serving the project.

The arrangement shifts risk in a defensible direction. Kentucky Power’s existing ratepayers are shielded from paying for infrastructure a data center might not fully use, and TeraWulf carries that exposure on its balance sheet instead. The trade-off is that doubling Muskie to 1 GW, and evaluating 2 GW, raises the collateral TeraWulf must post. The company says plainly that there can be no assurance the financing will close. Growing the campus depends on the utility’s construction timeline and on the company’s ability to keep posting guarantees.

Background

TeraWulf, based in Easton, Maryland, began as a bitcoin miner and has been repositioning itself as a developer and operator of power-backed data centers for AI and high-performance computing. Its Lake Mariner campus in New York, a former coal plant site, already hosts HPC tenants. The company is developing two large Kentucky campuses: Justified, a 480 MW project on a former aluminum smelter site in Hancock County, and Muskie, an approximately 285-acre site in eastern Kentucky’s EastPark Industrial Park that it acquired in May 2026 for phased AI and HPC development.

For AI data centers, grid power has become the main constraint on how fast capacity can come online, often more than buildings or equipment. Large new loads usually require the utility to build new substations and transmission ties, and state regulators must decide who bears the cost if the customer never uses the capacity. Kentucky’s PSC answered that question for Justified in August by approving an agreement it found protected existing customers. That gives TeraWulf a template, though not a guarantee, for Muskie.

Sources

Source: TeraWulf’s Kentucky campus to reach 1GW in 2029 (Data Center Dynamics) on TeraWulf’s amended Kentucky Power agreement for its Muskie Data Campus.

Primary sources: TeraWulf Form 8-K filed October 5, 2026 (Muskie expansion and financing strategy update); Exhibit 99.1: TeraWulf Expands Contracted Power Capacity at its Muskie Data Campus to 1 GW.