Key Notes
- Google obtains 5.4% ownership in Cipher through backstopping Fluidstack's $1.4 billion lease commitments in the deal.
- The infrastructure contract spans 10 years with potential extensions that could increase total revenue to $7 billion.
- Cipher's stock declined 12% despite the partnership as the company simultaneously seeks $800 million in debt financing.
AI infrastructure firm Fluidstack has entered a three billion dollar agreement to provide 168 MW of critical IT load to cryptocurrency mining company Cipher.
Under the arrangement, Google will backstop $1.4 billion of Fluidstack’s lease obligations in exchange for approximately 24 million shares of Cipher common stock, giving the Mountain View company a 5.4% stake.
Google Expands Crypto Mining Infrastructure Investments
The deal is for 10 years with provisions for two five-year extension options. According to a Sept. 25 press release , the contract represents approximately $3 billion in revenue over the initial 10-year term, but if the extensions are activated that figure would rise to about $7 billion.
This is the second Fluidstack deal Google has backstopped in as many months. In August, as Coinspeaker reported , data center infrastructure firm TeraWulf signed a HPC colocation agreement with Fluidstack worth at least $3.7 billion. Google backstopped TeraWulf’s obligations which gave it an 8% ownership stake.
At the time, TeraWulf saw its stock surge by as much as 38% off of Google’s involvement. Cipher doesn’t appear to be getting the same Silicon Valley bump. As of the time of this article’s publication, it’s down nearly 12%.
Cipher is down nearly 12% as it seeks to raise $800 million in debt. Source: Microsoft.
The negative movement could be related to Cipher’s other Sept. 25 news . The firm has announced a proposed private offering of $800 million in senior notes. According to the press release, it intends to use a portion of the funds to accelerate the build-out of its 2.4 GW pipeline.
These notes would mature in Oct. of 2031 and initial buyers would be given the opportunity to purchase an additional $120 million bringing the total on offer to approximately $920.
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