Google is expanding its involvement in the cryptocurrency sector by facilitating a significant partnership between AI compute company Fluidstack and Bitcoin mining firm Cipher. This move allows Google to acquire a 5.4% stake in Cipher, marking another foray into the Bitcoin mining industry for the tech giant.
Cipher recently announced a 10-year agreement to provide high-performance computing (HPC) colocation services in collaboration with Fluidstack, a renowned AI cloud platform. Under this agreement, Cipher will deliver 168 megawatts (MW) of critical IT load, with the potential to support up to 244 MW of gross capacity at its Barber Lake facility in Colorado City, Texas.
To bolster this initiative, Google will backstop $1.4 billion of Fluidstack’s lease obligations, providing essential support for project-related debt financing. In return, Google will obtain warrants to purchase approximately 24 million shares of Cipher common stock, translating to a pro forma equity ownership stake of 5.4%.
“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,” said Tyler Page, CEO of Cipher. He emphasized the significance of this transaction in reinforcing Cipher’s momentum in the HPC sector, expressing optimism about the growing interest in their expanding pipeline of sites. Page also suggested that this deal is likely the first of several within the HPC space, as Cipher strives to enhance its capabilities and solidify its position in an industry marked by rapid growth.
Despite the excitement surrounding this partnership, Cipher’s stock (CIFR) experienced a 9% decline on Thursday, trading at $12.81 per share, according to Yahoo Finance data.
The relationship between the Bitcoin mining sector and HPC data centers is becoming increasingly intertwined, particularly as both industries consume substantial amounts of energy. Many miners are pivoting their infrastructure to cater to the burgeoning demand in AI, especially as Bitcoin prices fluctuate and revenue from new coin minting diminishes.
This is not Google’s first investment in the cryptocurrency arena. In a similar vein, last month, the firm provided an additional $1.4 billion backstop to the Bitcoin miner TeraWulf, raising its total stake to $3.2 billion. In exchange, Google will receive warrants to purchase 32.5 million shares of the sustainable Bitcoin mining entity.
As Google deepens its engagement in the Bitcoin mining space, the implications for both sectors continue to unfold, highlighting a transformative period for the intersection of technology, cryptocurrency, and advanced computing.
