Key highlights:
- Cipher Mining signs a $3 billion, 10-year high-performance computing (HPC) colocation agreement with AI cloud provider Fluidstack.
- Google acquires warrants for a 5.4% equity stake in Cipher by backstopping $1.4 billion of Fluidstack’s lease obligations.
- The deal positions Cipher as a rising player in the AI infrastructure space, expanding beyond its core Bitcoin mining business.
A major pivot into AI infrastructure
Cipher Mining (CIFR), the fourth-largest publicly traded Bitcoin miner by market cap, has announced a landmark $3 billion deal with Fluidstack, a high-performance computing (HPC) infrastructure firm, in a move signaling its deepening involvement in artificial intelligence data services.
The 10-year colocation agreement will see Cipher deliver 168 megawatts (MW) of critical IT load at its Barber Lake site in Colorado City, Texas, with support from up to 244 MW of gross capacity. The site, which spans 587 acres, has the potential to expand to 500 MW. Cipher anticipates completing the facility build-out by September 2026.
The contract includes options for two additional five-year extensions that could raise the total value to approximately $7 billion. Cipher expects the Barber Lake project to yield robust net operating income margins of 80% to 85%, with capital expenditures estimated between $9 million and $11 million per MW.
Google steps in as strategic backer
As part of the transaction, Google has agreed to guarantee $1.4 billion of Fluidstack’s lease obligations, helping to secure project-related debt financing. In return, the tech giant will receive warrants to acquire approximately 24 million shares of Cipher common stock, translating to a 5.4% pro forma equity stake, subject to adjustments.
Cipher retains full ownership of the Barber Lake development despite Google’s involvement. This marks Google’s second major investment in a Bitcoin mining-linked HPC deal in recent months, following a similar arrangement involving TeraWulf in August.
Expansion strategy and capital raise
To fund the project and support its broader 2.4 gigawatt HPC development pipeline, Cipher has also proposed a private offering of $800 million in convertible senior notes due in 2031. The notes, which will not bear interest, may be converted into shares, cash, or a combination thereof. An additional $120 million in notes may be issued if initial purchasers exercise an over-allotment option.
Cipher CEO Tyler Page emphasized the strategic importance of the partnership: “This transformative transaction reinforces our HPC momentum as we continue to attract attention for our large and growing pipeline of sites.”
Fluidstack’s co-founder César Maklary added:
The deal highlights an accelerating trend among Bitcoin miners leveraging their energy infrastructure and data center expertise to serve the booming demand for AI compute power. Cipher joins a growing list of crypto-native firms transitioning toward HPC services, following similar moves by peers like CleanSpark.
Source: https://coincodex.com/article/73739/cipher-mining-inks-3-billion-deal-with-fluidstack-welcomes-google-as-strategic-investor/
