Bitcoin miner and data center operator Cipher Mining announced a 10-year high-performance computing colocation agreement with Fluidstack. Google will support the build out in exchange for a stake in Cipher. CIFR stock fell as bitcoin retreated.
Cipher Mining on Thursday announced it agreed to deliver 168 megawatts (MW) of IT and data computing capacity to Fluidstack at its Barber Lake site.
Fluidstack is an AI cloud platform that builds and operates HPC clusters for major companies.
The contract guarantees $3 billion in revenue over the initial 10-year term. The deal includes the option for two five-year extensions that could bring total contracted revenue to over $7 billion. The Barber Lake site has a maximum gross capacity of 244 MW, with the potential to expand capacity by 500 MW and 587 acres of surrounding land. Cipher says the site is "well-suited to meet the needs of next-generation compute."
Google Backing
Google plans to backstop $1.4 billion of Fluidstack's lease obligations to support project-related debt financing. In exchange, Google will receive warrants to acquire 24 million shares of CIFR common stock, which equates to about a 5.4% pro forma equity ownership stake.
Google agreed to a similar deal to backstop TeraWulf's colocation agreements with Fluidstack back in August.
Cipher plans to retain 100% ownership of the project, and will access capital markets "as necessary" to fund a portion of the project.
"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," CEO Tyler Page said in the release. "This transformative transaction reinforces our HPC momentum as we continue to attract attention for our large and growing pipeline of sites."
Page added that he believes the deal "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."
Excluding the contracted MWs for Fluidstack, Cipher has a growing pipeline of about 2.4 gigawatts prioritized for HPC.
Cipher Mining Stock
CIFR stock fell nearly 18% Thursday after surging almost 9% premarket. The price of bitcoin retreated below $109,000, with a 7% slide over the past week.
Shares have rallied more than 52% in September and are trading at four-year highs after its early August announcement about its Phase II build out for its Black Pearl site in Texas. The site will host AI computing power and hydropowered bitcoin mining.
Arete on Wednesday initiated coverage of Cipher Mining and two other bitcoin miners with buy ratings.
Cipher is up about 151% this year.
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