AI computing infrastructure provider Fluidstack has secured a substantial $3 billion deal with Cipher, a prominent cryptocurrency mining operation, to supply 168 MW of vital IT infrastructure power.
As part of the agreement, tech giant Google is set to guarantee $1.4 billion of Fluidstack’s lease commitments. In return, Google will receive roughly 24 million shares of Cipher’s publicly traded stock, resulting in a 5.4% ownership stake for the Mountain View-based corporation.
The contract is structured for an initial duration of 10 years, with options to extend it for two additional five-year periods. A press announcement released on September 25th indicated that the deal is projected to generate approximately $3 billion in revenue over the initial decade. If the extension options are exercised, that revenue figure could potentially climb to around $7 billion.
This marks the second instance within the past two months where Google has provided financial backing for a Fluidstack agreement. As previously reported, data center firm TeraWulf entered into a high-performance computing (HPC) colocation agreement with Fluidstack in August, valued at a minimum of $3.7 billion. Google similarly backed TeraWulf’s financial obligations, which resulted in an 8% ownership share for the search engine company.
While TeraWulf’s stock experienced a surge of up to 38% following Google’s involvement, Cipher’s market performance appears to be reacting differently. As of this writing, Cipher’s stock is down by nearly 12%.
Cipher’s stock decline coincides with its ongoing efforts to raise $800 million through debt financing. Source: Microsoft.
The negative stock movement might be linked to Cipher’s other announcement on September 25th: a proposed private offering of $800 million in senior notes. According to the official press release, a portion of these funds is earmarked for accelerating the development of Cipher’s 2.4 GW project pipeline.
These senior notes are scheduled to mature in October 2031. The initial purchasers will also have the opportunity to acquire an additional $120 million in notes, potentially increasing the total offering to approximately $920 million.
Original story available at: Google Gains 5.4% Cipher Stake by Backing $1.4 Billion in Fluidstack Mining Deal by Tristan Greene on Coinspeaker.com