Google Supports Cipher's $3 Billion AI Shift Amid Rapid Growth in Server Market

[1]

Supports Major AI Agreement! Has Taken a Significant Step Forward

[2]

Mining Enters 10-Year, 168 MW AI Hosting Contract with Fluidstack

[3] Google (GOOG) Reaches AI Hosting Agreement with

[4] Google Makes Major Bet on Crypto Miner Cipher to Advance AI Infrastructure

[5] Google Commits to

Miner Cipher Mining via $3 Billion AI Partnership

[6] Cipher Secures Google-Backed $3B AI Hosting Pact, Plans $800M Offering

[7] Crypto Shares Dip Despite $3B AI Partnership with Google

[8] Bitcoin Miner Cipher Lands $3B Google-Backed AI Hosting Agreement

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Cipher Mining Inc. (NASDAQ: CIFR) has increased its private convertible senior notes offering from $800 million to $1.1 billion after finalizing a landmark 10-year, $3 billion AI hosting contract with Fluidstack. The arrangement, which includes a $1.4 billion financial guarantee from Google and a 5.4% equity stake in Cipher, signals a major shift for the world’s fifth-largest public Bitcoin miner toward high-performance computing (HPC) and AI infrastructure.

This expanded offering features $1.1 billion in convertible senior notes maturing in 2031, plus an extra $200 million in purchase options. The funds will support the buildout of Cipher’s Barber Lake site in Texas, which is set to provide 168 megawatts of essential IT load by September 2026. With the potential to scale up to 500 MW, this facility is part of a larger 2.4 gigawatt pipeline focused on HPC. Google’s guarantee covers Fluidstack’s lease commitments, and its warrants for 24 million shares (representing 5.4% pro forma ownership) align with Cipher’s strategy to utilize capital markets for project funding.

The Fluidstack deal offers two five-year renewal options, which could raise the agreement’s total value to $7 billion. CEO Tyler Page described the deal as “transformative,” highlighting Cipher’s growing momentum in HPC and noting it as the first of several expected partnerships in the field. The agreement also reflects Google’s approach of securing AI infrastructure through third-party hosting, a strategy it previously used in its August 2025 deal with TeraWulf.

The market’s response to the news was mixed. Cipher’s stock jumped 20% in pre-market trading but ended the day down 17.5% amid overall market instability. Analysts point to investor caution after the stock’s sevenfold increase since April 2025. Financially, Cipher reported Q2 2025 revenue of $44 million, missing the $51.9 million estimate, but the AI hosting contract is expected to bring in $3 billion in revenue over its initial term, with net operating income (NOI) margins projected at 80%-85%.

Industry experts note the broader trend of crypto miners moving into AI infrastructure. With energy-efficient operations and established power resources, firms like Hive Digital and CleanSpark are also adapting their assets for AI computing. Cipher’s construction costs of $9–$11 million per megawatt and anticipated $1.08 billion net proceeds from the offering put it in a strong position to meet rising demand for AI computing power.

The AI server industry, valued at $128 billion in 2024, is expected to grow at a 28.2% annual rate through 2034, fueled by edge computing and cloud growth. Cipher’s strategic shift fits this trend, using Google’s financial support to expand operations while keeping full ownership of the Barber Lake project. As Cipher aims for $7 billion in potential revenue, its future will depend on managing execution risks, including renewal options and market fluctuations.