Cipher Mining signs $3 billion AI hosting deal with Fluidstack

Cipher Mining Inc. (NASDAQ: CIFR) entered into a 10-year high-performance computing colocation agreement with Fluidstack, an AI cloud platform, the company announced. The deal involves delivering 168 MW of critical IT load at Cipher's Barber Lake site in Colorado City, Texas.

The agreement represents approximately $3 billion in contracted revenue over the initial 10-year term. Two five-year extension options could bring total contract revenue to approximately $7 billion if exercised. Cipher expects to deliver the 168 MW capacity by September 2026.

Google will backstop $1.4 billion of Fluidstack's lease obligations to support project-related debt financing. In return, Google will receive warrants to acquire approximately 24 million shares of Cipher common stock, representing about 5.4% pro forma equity ownership stake, subject to adjustment and potential cash settlement under certain circumstances.

The site will be supported by a maximum of 244 MW of gross capacity at the Barber Lake location, which spans 587 acres and has potential for 500 MW capacity expansion. The agreement includes a modified gross lease structure with annual escalators and an expected site net operating income margin of 80% to 85%.

Cipher estimates project costs of $9 million to $11 million per MW of critical IT load. The company plans to retain 100% ownership of the project and access capital markets to fund a portion of the development.

"This transformative transaction reinforces our HPC momentum as we continue to attract attention for our large and growing pipeline of sites," said Tyler Page, Cipher's CEO.

Excluding the contracted capacity for Fluidstack, Cipher maintains a pipeline of approximately 2.4 GW being prioritized for high-performance computing applications. Morgan Stanley served as sole financial advisor to Cipher on the transaction.

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