Bitcoin miner Cipher signs $3 billion Google-backed AI hosting deal over ten years

Cipher Mining, the fourth-largest public bitcoin miner by market cap, unveiled a two-pronged strategic financing and expansion move on Thursday centered on its growing high-performance computing ambitions.

The company said it has signed a 10-year colocation deal with AI cloud infrastructure firm Fluidstack and simultaneously proposed a private offering of $800 million in convertible senior notes maturing in 2031.

Under the Fluidstack agreement, Cipher will provide 168 MW of critical IT load capacity, supported by its 244 MW gross capacity at its Barber Lake development in Colorado City, Texas. The contract carries an estimated value of approximately $3 billion over its initial term, with options for two five-year renewals that could raise the total to about $7 billion.

Google will backstop $1.4 billion of Fluidstack's lease obligations, according to a statement, in exchange for warrants that will allow it to acquire approximately 24 million shares of Cipher stock — equivalent to about 5.4% of the pro forma equity — in return. Cipher retains full ownership of the project, however.

"We are thrilled to be working with Fluidstack to develop HPC data centers, and we look forward to welcoming Google as an investor in Cipher. This transformative transaction reinforces our HPC momentum as we continue to attract attention for our large and growing pipeline of sites," Cipher CEO Tyler Page said. "We believe this transaction represents the first of several in the HPC space as we continue to scale our capabilities and strengthen our position in this rapidly growing sector."

Concurrently, Cipher announced a proposed private offering of $800 million in convertible senior notes due October 2031. The notes won't bear interest and will be convertible under certain conditions into shares, cash, or a combination. Cipher also expects to grant initial purchasers a 13-day option to buy up to an additional $120 million in notes.

Cipher intends to use proceeds for multiple strategic purposes, including funding the Barber Lake project build, supporting its broader 2.4 GW HPC pipeline, and expanding other site development, the firm said.

Following the news, Cipher's stock jumped 22.4% in pre-market trading on Thursday before correcting. CIFR is currently changing hands for $14.95 at a market cap of $5.6 billion, having gained more than 192% year-to-date, according to The Block's Cipher Mining price page.