TLDR
- Cipher Mining (CIFR) secured a 10-year AI hosting deal with Fluidstack worth $830 million in contracted revenue
- The agreement adds 39 MW of critical IT load at Cipher’s Barber Lake facility in Texas, bringing Fluidstack’s lease to the full 300 MW capacity
- Google increased its backstop support by $333 million, raising total backing to $1.73 billion
- Optional five-year extensions could push total deal value to $2 billion for this expansion and $9 billion across the partnership
- Cipher Mining stock jumped 13% following the announcement, building on earlier gains from strong Nvidia earnings
Cipher Mining Inc. stock rose 13% on Thursday after the company announced a 10-year AI hosting agreement with Fluidstack. The deal brings in approximately $830 million in contracted revenue over the initial term.
The agreement centers on Cipher’s Barber Lake facility in Colorado City, Texas. Fluidstack will lease an additional 39 MW of critical IT load, supported by up to 56 MW of gross capacity. This expansion brings Fluidstack’s total lease at the site to the full 300 MW available.
The contract includes two optional five-year extensions. If both extensions are exercised, the total contracted revenue from this specific expansion would reach around $2 billion. The broader partnership value between the companies would climb to approximately $9 billion.
Google stepped in with financial backing for the project. The tech giant agreed to backstop an additional $333 million of Fluidstack’s lease commitments. This increase brings Google’s total backstop across its partnership with Fluidstack and Cipher to $1.73 billion.
Financing and Development Costs
Cipher plans to fund the buildout through project-related debt and about $118 million in additional equity contributions. The company estimates development costs at roughly $9 to $10 million per megawatt of critical IT load.
As part of the financing structure, Cipher announced plans to issue $333 million of additional 7.125% senior secured notes due 2030. These notes will help support construction of the expanded facilities at Barber Lake.
The company projects strong returns from the site. Net operating income margins are expected to fall in the 85% to 90% range.
Stock Performance and Market Reaction
Cipher Mining shares were already trading higher by more than 10% before Thursday’s announcement. Those gains came after Nvidia posted strong earnings results and guidance Wednesday evening. The new Fluidstack deal pushed CIFR shares to a 13% gain for the day.
Tyler Page, Cipher’s CEO, said the company is excited to expand its partnerships with Fluidstack and Google. He called the transaction validation of Cipher’s position in high-performance computing development.
The deal marks the third major transaction between these partners. Page noted the agreement underscores momentum that will drive growth across Cipher’s pipeline of sites.
Cipher currently maintains a development pipeline of 3.2 gigawatts. The company positions itself as a leader in HPC infrastructure development.
The Barber Lake facility represents a key asset for Cipher. With Fluidstack now leasing the full 300 MW capacity at the site, Cipher has locked in long-term revenue from the location.
Google’s increased financial backing through the backstop arrangement provides additional stability to the project. The $1.73 billion in total support demonstrates Google’s confidence in the partnership structure and Cipher’s execution capabilities.
The 10-year initial term provides revenue visibility for Cipher through 2035. The optional extensions could stretch that timeline to 2045 if both are exercised.
Cipher expects the new capacity to come online as construction progresses. The company will use the project financing and equity contributions to build out the infrastructure needed to support Fluidstack’s operations at the expanded facility.
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