Cipher Signs $3B Contract, Google Takes a Stake
Cipher Mining, the fourth-largest publicly traded bitcoin miner by market capitalization, has announced a groundbreaking strategic agreement worth $3 billion. The company signed a ten-year contract with cloud provider Fluidstack, which specializes in artificial intelligence infrastructure, and unveiled plans to issue $800 million in convertible bonds. Google is also joining the project, securing a stake in Cipher through the deal.
Ten-year deal with Fluidstack
Under the agreement, Cipher will provide 168 MW of computing capacity through its Barber Lake data center in Texas, which has a total gross capacity of 244 MW. The contract is valued at approximately $3 billion, with the possibility of two five-year extensions that could bring the total to $7 billion.
Google secures stake in Cipher
Google has committed to back Fluidstack’s obligations worth $1.4 billion. In return, it will receive options to purchase around 24 million Cipher shares, representing about 5.4 percent of the company. Cipher will, however, remain the owner of the project. According to CEO Tyler Page, the deal marks the first step in strengthening the company’s position in the rapidly growing high-performance computing sector.
Expansion financed through bonds
Alongside the multi-billion-dollar deal, Cipher announced a plan to raise additional capital. The company intends to issue $800 million in convertible bonds, maturing in 2031. These securities will carry no interest, but investors will be able to convert them into cash, company stock, or a combination of both. The offering may be increased by up to an additional $120 million. Cipher plans to use the proceeds to complete the Barber Lake data center, support its large-scale 2.4 GW high-performance computing project, and expand to other locations.
New trend among crypto miners
Cipher’s strategy reflects a broader trend in the cryptocurrency industry. Bitcoin miners are seeking to diversify their operations as mining revenues are increasingly impacted by rising network difficulty and regular reward halvings. High-performance computing, critical for artificial intelligence, scientific research, and cloud services, offers new opportunities. The convergence of Blockchain, AI, and HPC could represent a new era for companies like Cipher Mining.
Sources:
https://www.theblock.co/post/372315/cipher-mining-google-backed-3-billion-usd-ai-hosting-deal