Cipher Mining (CIFR) expands Google-backed HPC deal with Fluidstack
Cipher Mining (CIFR) said on Thursday that it had entered into an additional 10-year colocation agreement with AI cloud platform Fluidstack to deliver high-performance computing (HPC) services.
Cipher, which builds industrial-scale data centers for bitcoin mining and HPC, will deliver an additional 39 MW of critical IT load, supported by a maximum of 56 MW of additional gross capacity.
The miner will deliver the service at its Barber Lake site in Colorado City, Texas.
Cipher signed its original 10-year agreement with Fluidstack in September, which called for the company to deliver 168 MW of critical IT load, supported by a maximum of 244 MW of gross capacity at its Barber Lake site.
That deal was expected to bring Cipher $3 billion in contracted revenue over the initial 10-year term. It also included two five-year extension options.
If Fluidstack exercised both those options, it would push the total contract revenue to approximately $7 billion.
Google (GOOG) also agreed to backstop $1.4 billion of Fluidstack's lease agreements to support project-related debt financing.
As part of the agreement, Google received warrants to acquire approximately 24 million shares of Cipher common stock, giving it a roughly 5.4% equity stake in the company.
With the expanded deal announced on Thursday, Cipher expects to realize another $830 million of contracted revenue over the initial 10-year agreement. It also contains the two-year extensions, and if exercised would bring the total contracted revenue of this contract to $2 billion — and possibly $9 billion over the entire lease.
Google has agreed to backstop an additional $333 million of Fluidstack's lease agreements.
Wall Street sees Cipher as an HPC leader
“We’re excited to expand our partnerships with Fluidstack and Google as we develop the remaining current capacity at our Barber Lake site,” Cipher CEO Tyler Page said in a statement. “This third transaction further validates Cipher’s position as a leader in HPC development and underscores the strong momentum that will continue to drive growth across our pipeline of sites.”
Cipher's stock has surged 213.8% for the year.
The company said that it intends to use the proceeds from the project-related debt, along with about $118 million from its own equity contributions, to finance the construction of incremental facilities for the expansion of this deal.
Citizens analyst Greg Miller initiated coverage of Cipher on Wednesday with an Outperform rating and a $30 price target.
Miller said he was bullish on Cipher because he sees them as having an "early-mover advantage in large-scale HPC capacity with long-term monetization upside."
"It remains one of the few that has capacity for 2026," Miller wrote. "Offering HPC on an industrial scale — With like 3.8 GW of capacity to bring to bear in the HPC market, entirely in Texas, we expect Cipher's HPC inventory will rival that of some of the major projects in the market like Stargate with 3 GWs planned."
"We expect many of these companies could become major data center operators," Miller added.
Cipher's stock surged this past summer when rumor spread on social media that it was closing in on a deal with Meta (META). However, that deal never came to pass.