Google Takes 5.4% Stake in Cipher’s $1.4B AI Shift

Tech giant Google has acquired approximately 5.4% equity stake in Bitcoin mining company Cipher Mining through a $1.4 billion financial backstop deal, supporting Cipher’s transition from crypto mining to AI data center infrastructure.

The investment, announced Thursday, is part of a 10-year hosting agreement between Cipher Mining and AI cloud platform Fluidstack, worth around $3 billion in contracted revenue. Google will backstop $1.4 billion of Fluidstack’s lease obligations to secure project financing, receiving warrants for about 24 million Cipher common shares in return.

The deal validates the crypto mining industry’s shift to AI infrastructure, with Cipher (Nasdaq: CIFR) leveraging its existing data center expertise and power assets originally built for Bitcoin mining to meet AI demand. With this arrangement, Google becomes a significant stakeholder in a company that operates a pipeline of roughly 2.4 gigawatts of capacity.

Under the agreement, Cipher will deliver 168 MW of critical IT load at its Barber Lake site in Colorado City, Texas, supported by 244 MW of gross capacity and expansion potential of up to 500 MW across 587 acres.

CEO Tyler Page described the partnership as “the first of several projects in the HPC space”, positioning Cipher as a major player in AI infrastructure. He added: “We’re excited to partner with Fluidstack on HPC data centers and welcome Google as an investor in Cipher.”

Google’s financial support strengthens Cipher’s development capabilities while ensuring Fluidstack access to substantial compute resources. Fluidstack, which builds HPC clusters for major enterprises, serves as a key intermediary in the AI infrastructure supply chain.

The agreement includes two five-year extension options, potentially raising total contract value to $7 billion. Cipher expects net operating income margins of 80–85%, with estimated project costs of $9–11M per MW of IT load.

The transaction highlights how Bitcoin mining firms are reinventing themselves as AI infrastructure providers, repurposing existing data centers and power management expertise for high-performance computing. Cipher’s pivot underscores mining infrastructure’s adaptability to AI workloads.

Cipher’s stock fell 17.54% on Thursday to $11.66 after the announcement but has since recovered slightly to $12.24 (+4.97%).

Google’s strategic investment reflects broader trends of major tech companies securing access to AI infrastructure while validating the crypto mining industry’s evolution beyond blockchain.

Fluidstack co-founder César Maklary emphasized: “Together with Cipher Mining, we are committed to accelerating the development of critical infrastructure that frontier AI companies depend on.”

The warrant arrangement includes adjustment provisions and potential cash settlement options, providing flexibility in Google’s final ownership. Cipher will retain 100% project ownership while accessing capital markets to fund future requirements.

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