Google bets again on transforming into a mining company, acquiring a 5.4% stake in Cipher Mining to secure AI computing power
Google has obtained the right to purchase 5.4% of Cipher Mining's shares as part of a multi-year data center agreement with Fluidstack. Google has agreed to guarantee the $1.4 billion contract between Fluidstack and Cipher, which involves approximately $3 billion in leasing revenue. This is Google's second deal with Fluidstack, reflecting the demand for computing resources driven by artificial intelligence services. Cipher plans to finance its expansion with the support agreement from Google
According to the Zhitong Finance APP, as part of a multi-year data center agreement with artificial intelligence computing startup Fluidstack, Google (GOOGL.US) has obtained the right to purchase a 5.4% stake in cryptocurrency data center operator Cipher Mining (CIFR.US). According to a statement released by Cipher, Google has agreed to guarantee $1.4 billion of Fluidstack's obligations under a ten-year contract with the company (not covering the entire contract amount), which involves approximately $3 billion in leasing revenue. This is the second such deal Google has reached with Fluidstack in the past two months, highlighting the strong demand for computing resources in AI services.
As one of the largest investors in computing capacity in Silicon Valley, Google invests tens of billions of dollars each year in its products and cloud business. Although it primarily invests in its own data centers, like Microsoft (MSFT.US), it has begun collaborating with emerging AI cloud service providers like Fluidstack to expand its computing resource reserves.
As of now, Google has not commented on this.
Cipher emphasized in its statement that it will finance its expansion plans through the support agreement with Google. The original ten-year contract includes two five-year extension options, which, if fully exercised, would add an additional $4 billion in revenue.
As of the time of publication, Cipher, headquartered in New York, saw its stock price drop by 3.04% in pre-market trading, closing at $14.14 per share on Wednesday, with a year-to-date increase of over 200%.
The spending of "new cloud" operators has surged, providing additional computing resources to support AI training and model deployment needs. These operators are often transformed from former cryptocurrency mining companies, as they already possess large-scale infrastructure, making them important targets for AI computing investments.
For example, Google previously reached a similar agreement with another cryptocurrency data center operator, TeraWulf, obtaining warrants to acquire up to 14% of the company and also supporting Fluidstack's ten-year capacity purchase contract.
Earlier this year, Fluidstack announced its participation in a supercomputer project in France with a total investment of €10 billion
