Google Dives Deeper Into Bitcoin Mining by Backstopping AI Hosting Deal

In brief

Google is backstopping a deal between AI compute company Fluidstack and Bitcoin miner Cipher.
The deal will give Google the right to buy a 5.4% stake in Cipher.
This isn’t the first time Google has invested in the Bitcoin mining space.

Google is diving deeper into the Bitcoin mining world after backing a deal that gives the tech giant a more than 5% stake in Nasdaq-listed miner Cipher.

Cipher announced Thursday that it signed a 10-year high-performance computing colocation agreement with AI cloud platform Fluidstack, a premier AI cloud platform. The deal will see Cipher deliver 168 MW of critical IT load, supported by a maximum of 244 MW of gross capacity, at its Barber Lake site in Colorado City, Texas.

Google said it will backstop $1.4 billion of Fluidstack’s lease obligations to support project-related debt financing and will receive warrants to acquire approximately 24 million shares of Cipher common stock—or 5.4% pro forma equity ownership stake.

“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,” Tyler Page, the Bitcoin miner’s CEO, said.

“This transformative transaction reinforces our HPC momentum as we continue to attract attention for our large and growing pipeline of sites. 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.”

Cipher’s stock (CIFR) was trading 9% lower on Thursday at $12.81 per share, per YahooFinance data.

Google did not immediately respond to Decrypt‘s request for comment.

The Bitcoin mining space, which uses huge amounts of energy, is increasingly intertwined with HPC data centers.

Both crypto mining and the AI industry use huge amounts of energy, and when Bitcoin’s price falls and minting new digital coins isn’t generating enough revenue, some miners have pivoted their infrastructure to address AI demand.

Last month, the tech giant Bitcoin miner TeraWulf announced that Google was providing an incremental $1.4 billion backstop to support project-related debt financing, upping its total stake to $3.2 billion.

In exchange, Google would receive warrants to buy 32.5 million shares of the sustainable Bitcoin miner, the announcement said at the time.