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Bitcoin mining as 'energy infrastructure': TeraWulf CEO details zero carbon emission operation

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Paul Prager, Founder & CEO of TeraWulf, speaks on Yahoo Finance Live about TeraWulf going public and implementing renewables and nuclear power.

Video Transcript

AKIKO FUJITA: Green Bitcoin mining platform Terawulf going public today. The Gwyneth Paltrow-backed company debuting on the NASDAQ under the ticker WULF. And you see shares, they're sliding in its debut. Terawulf founder and CEO Paul Prager is joining us now to discuss, along with Yahoo Finance's Brian Sozzi. Paul, congratulations on the debut. I know CEOs don't like to talk about the stock move, but I do have to ask you about it because it is down nearly 20% today. A bit of a tough go in your debut. What do you think investors are getting wrong?

PAUL PRAGER: I think it's a tough day for tech in general. And I think that it's a new stock. People have got to get to know us. And I think they got to get to appreciate our business plan and our ability to execute. We're in this for the long haul. It's not just about today.

BRIAN SOZZI: Well, Paul, to that point, take us through a little bit what you do and what you're up to next year.

PAUL PRAGER: Sure, we're mining Bitcoin, and we're mining it primarily in two sites. And we're doing it in the most responsible way. We're about zero carbon emission. So we'll have success, [INAUDIBLE] by, you know, by June. We'll be-- that's bigger than anybody else that's out there today. And we're about zero carbon emissions, so we're going to be executing using renewables and nuclear power.

BRIAN SOZZI: Paul, who do you view as your competitors in this space?

PAUL PRAGER: I think what's good for mining, what's good for Bitcoin is, you know, a very robust and vibrant mining community. But I think that we are mining 10.0. Again, we're very ESG oriented, not as an ideal, but as a practice. And we have a unique ability to execute on the business plan because we've got 25 years of operational excellence in energy infrastructure. And at its core, Bitcoin mining is energy infrastructure.

ZACK GUZMAN: Paul, thanks for coming on. It's Zack here. I mean, I've been talking with a few of these kind of green Bitcoin mining companies. Bitfarms is another one that comes to mind there, up by about 170% on the year so far. They're also heavily investing in upping their power and energy in the mining space. I mean, how much does maybe the competition in the green mining space maybe increase costs as you see it? And I guess, what separates Terawulf as you go up against them?

PAUL PRAGER: Yeah, I think several things. Number one is scale. We have a pipeline seethrough through to 800 megawatts in two sites. Number two is, you know, we're not just a bunch of folks who are looking for stranded electricity at inexpensive pricing and we have miners on order. We have built energy infrastructure for the last 25 years. We have 15 members of our team that have been with us over 15 years. I mean, we have had hundreds of employees at power plants around the country and internationally as well. We understand energy infrastructure.

So we understand how to source electricity, how to mitigate the risks of the procurement of electricity. We know how to put the infrastructure in the ground so we could get a mining operation at scale up and running as reliably and as quickly as possible. I think we're unique in that space.

And from the ESG perspective, we're not only zero carbon emission as opposed to focused on carbon neutrality, but we've got a management team where ESG has not been an ideal. It's been our practice. Again, we have five of our seven executive members of the team are women, all been with the company for over a decade. I think it speaks to where we are headed in terms of our likelihood for success.

AKIKO FUJITA: Paul, can you expand on that scale you just talked about? I mean, you know, we're talking about Terawulf right now, but clearly, within this space, we have seen in increasing awareness of the use of energy, especially as we've seen mining operations migrate out of China, expand here in the US. I mean, how easy is it from an infrastructure perspective and a cost perspective to be able to replicate the kind of footprint that you've established?

PAUL PRAGER: I don't think it's easy at all, and you've got the issue of time. Listen, Bitcoin is finite. You want to get there early, and you want to get there hard and fast. If you wanted to be mining today, you had to order switchgear and transformers 18 months ago. We did. So somebody could go find electricity, maybe procure some miners, tell everybody they want to be in the mining business, but they're not up and mining in the first quarter of next year. We are. Again, scale's an important element.

And the third thing is you have to understand how to procure electricity. If you're a fella and you bought down in Texas, and you went through the blizzard there, then you realize what can happen to the grid, you have to understand what to do, how to mitigate risks for events like that. That's all we've ever done for the last 25 years. So I think there were other folks that are out there that are trying to mine Bitcoin. They're trying to do it in a socially responsible way, but not at the scale that we are.

Finally, I would tell you I think regulation is coming. We welcome that. When regulation comes, we think it will come in the form of a carbon tax. So I think that will be enabling and prove us yet again to be the least expensive mining operator out there.

BRIAN SOZZI: Paul, talk to us about that potential for a carbon tax. How do you think that would impact the Bitcoin community?

PAUL PRAGER: I think it will increase people's operating costs. We're going to be mining. You know, we're making Bitcoin 5,500, right? And I think other folks that are out there mining at slightly higher prices or elevated prices to that are going to have to pay an additional cost when it comes to a carbon tax if they're not mining with zero carbon emission. There's a big difference between carbon neutrality and zero carbon emission. We're zero carbon emission.

ZACK GUZMAN: Yeah, and lastly, I mean, I guess the other thing that separates you guys from some other Bitcoin mining companies is the investors you've now brought on board. Not only Gwyneth Paltrow, but also Mindy Kaling, Lilly Singh as well. I'm not sure if they're getting as deep into kind of the exahashes equations here and trying to figure out how much energy and the cost you guys might have, but what does it maybe say having them on board about maybe mainstream adoption in Bitcoin and where the mining space is going?

PAUL PRAGER: Sure. You know, we raised $200 million last week, a combination of debt and equity. The debt piece was the first covenant-like term loan done in the space. The equity came and it came before we went public. So it was very, very special. We really and genuinely appreciate the confidence and faith that all the investors had.

We think Gwyneth and Kinship is no different than any other savvy investor. These are supposed rusticated entrepreneurs. They want to see a return on their investment. But they recognize that there is a responsible way to mine Bitcoin. And that's why they invested in us. Personally, I really appreciate the fact that we have a group that's so socially responsible, demonstrating their confidence in our business plan. I think it says a lot. We're very excited about having them on board as partners.

ZACK GUZMAN: That's interesting stuff to see. And obviously, we'll be tracking things beyond just day one here, but Paul Prager, Terawulf founder and CEO, appreciate you coming on here, alongside Yahoo Finance's Brian Sozzi. Thanks again for the time.