Google Backstops Anthropic's $19 Billion Kentucky Data Centre Leases With TeraWulf

TeraWulf said in a press release on November 4 that Google LLC, an Alphabet subsidiary, had signed credit support agreements tied to anticipated debt financing for the campus. The financing supports about $19 billion of contracted lease commitments with Anthropic, which signed a 20-year lease in July for roughly 401 megawatts of critical IT capacity at the site. The company has not said how much it plans to borrow, and the debt has not yet been raised.

The arrangement matters because the cost of building AI data centres depends heavily on who is paying the rent. Anthropic is a fast-growing but privately held company; Alphabet's senior unsecured debt is rated AA+ by S&P Global Ratings and Aa2 by Moody's, as TeraWulf pointed out in its release. Swapping the tenant's credit risk for Google's should let TeraWulf raise money more cheaply.

"We structured our Anthropic leases from the outset to address counterparty credit," Paul Prager, TeraWulf's chairman and chief executive, said in the release. "Google's credit support strengthens our ability to secure competitive project financing." Chief financial officer Patrick Fleury said: "Cost of capital is fundamental to infrastructure development."

How the Backstop Works

A regulatory filing made the same day sets out more of the mechanics. TeraWulf signed three separate credit support agreements, one each for buildings designated CB-1, CB-2 and CB-3, with its landlord subsidiary Raylan Data, Justified DataPower, Anthropic and Google. Each takes effect when the final data hall under its lease begins operating.

If Anthropic misses a payment or becomes insolvent, Google can pay the rent due and take over the lease as tenant, or in certain circumstances pay a termination fee instead, according to the filing. It can also defer that choice for a time, provided it covers the unpaid rent while it decides. Paying the termination fee would entitle Google to acquire an equity interest in Raylan, and the fee amortises over a defined term. The backstops fall away if Anthropic, or an affiliate guaranteeing its obligations, achieves and holds certain investment-grade credit ratings for at least three months. Raylan and Anthropic also amended the leases on the same day; the filing does not describe those changes.

The filed agreement also ties the site to Google's chips. Unite.AI, which reviewed it, reported that Anthropic must use only Google-approved TPUs as accelerators on the premises for the full term, and that Google cannot choose to terminate a lease in the first six years after its backstop takes effect unless the installed TPU pods can draw less than half of the tenant's critical power.

Fluor Signs On to Build

TeraWulf also said Fluor Enterprises has signed a definitive engineering, procurement and construction agreement on a guaranteed-maximum-price basis covering three data centre buildings at Justified, following a limited notice to proceed issued in March. The price itself is still being set as engineering and procurement advance. TeraWulf said phased ready-for-service dates are expected to begin in late 2027 and run through the second quarter of 2028.

"Fluor gives us the ability to scale execution," Prager said.

The deal extends a relationship in which Google has repeatedly lent its balance sheet to former crypto miners turned AI landlords. It earlier backstopped lease obligations at TeraWulf's Lake Mariner campus in New York and took warrants in the company. TeraWulf said it has also recently expanded contracted power capacity to 1 gigawatt at its Muskie Data Campus in eastern Kentucky, alongside developments in New York and Maryland. The next milestone for investors is the size and pricing of the Justified debt package that the Google agreements are meant to support.