TLDR
- TerraWulf launched a $3.2B private note, the largest ever by a public miner.
- Bitcoin miners raised $6B in debt and notes in Q3 2025 alone.
- TerraWulf’s $250M annual interest exceeds its 2024 revenue of $140M.
- AI and HPC pivots attract new investors despite rising execution risks.
Bitcoin mining firms are shifting their business models as AI and HPC investments replace traditional mining revenue. Over $6 billion in debt and convertible notes was raised in Q3 2025 alone, led by major public miners like TerraWulf, MARA Holdings, and Cipher. While these moves attract investors and higher valuations, the mounting debt and high interest expenses raise questions about whether the new strategies will generate sustainable revenue.
Miners Raise $6 Billion Amid Strategic Shift
Bitcoin miners raised over $6 billion in Q3 2025 as they pivot from pure bitcoin operations to artificial intelligence (AI) and high-performance computing (HPC). The funding came from debt and convertible note issuances, with several large players turning to credit markets to fund new infrastructure.
TerraWulf, MARA Holdings, Cipher, and IREN led the fundraising surge. TerraWulf alone launched a $3.2 billion private placement of senior secured notes, which MinerMag described as the largest single offering ever made by a public miner.
High Interest Costs Raise Execution Risks
While this pivot has attracted investor attention, the cost of capital is placing strain on miner balance sheets. TerraWulf’s latest debt carries a 7.75% coupon, translating to around $250 million in annual interest. That figure is nearly double its 2024 revenue of $140 million, according to MinerMag.
Other miners, like IREN, have issued convertible bonds with zero-coupon structures to reduce near-term cash expenses. Still, the risk of shareholder dilution remains present. The pressure to generate new revenue from AI and HPC projects is now a central concern for investors.
AI and HPC Drive Valuations Despite Volatility
Investors have rewarded bitcoin miners expanding into AI and HPC, especially as the bitcoin market has remained relatively flat in 2025. Bitcoin (BTC) has risen only 10% year-to-date. Meanwhile, the corporate bitcoin treasury trend has weakened, reducing a key income source for miners.
CleanSpark and Bitfarms also turned to credit lines and convertible notes, raising hundreds of millions to support expansion into computing services. Bitfarms recently announced a $300 million convertible note, while IREN issued $1 billion in zero-coupon bonds.
This strategic shift is attracting a broader investor base, as the traditional correlation with bitcoin price weakens. AI and HPC services offer a more stable demand profile, though they require high upfront capital.
Concerns Over Repeat of 2022 Bear Market
The current debt-driven buildout comes with fresh concerns. In 2022, Core Scientific and others faced machine repossession and bankruptcy during a bitcoin market collapse. Lenders had used mining hardware as collateral, which became nearly worthless when hash prices fell.
The hope this time is that diversification into AI and HPC can avoid similar outcomes. However, investors remain cautious, focusing on actual revenue generation from these new services. Execution risk is high, and repayment obligations are growing faster than income in some cases.
MinerMag noted that while this debt cycle is different in nature, it still relies on successful delivery of high-performance compute services. Companies like TerraWulf must prove they can convert infrastructure spending into revenue growth, or face the consequences of overleveraging.
