Cipher Mining Inc. has just announced a significant expansion of its partnership with FluidStack, signing a 10-year high-performance computing (HPC) colocation agreement. This new agreement will see Cipher deliver an additional 39 megawatts (MW) of critical IT load, supported by a maximum of 56 MW of additional gross capacity at its Barber Lake site in Colorado City, Texas. The transaction is expected to secure approximately $830 million in contracted revenue over the initial 10-year term.
This deal represents a substantial increase in the size of the original transaction with FluidStack, with the total contracted revenue across the partnership reaching approximately $3.8 billion over the initial 10-year term. Additionally, Google has expanded its backstop of FluidStack’s obligations by an additional $333 million, bringing the total backstop to $1.73 billion.
Cipher Mining Inc.'s CEO, Tyler Page, expressed excitement about the expanded partnerships with FluidStack and Google, highlighting the company's position as a leader in HPC development and its strong growth momentum.
The transaction details include approximately $830 million of contract value across the initial 10-year term, with the potential for $2.0 billion of contract value if two five-year extension options are exercised. The total contract value across the partnership could reach approximately $9.0 billion if all extension options are exercised.
The company also provided insights into the financial aspects of the deal, including a modified gross lease with annual escalators, an expected site net operating income (NOI) margin of 85%-90%, and estimated project costs of approximately $9-$10 million per MW of critical IT load. Moreover, Google's backstop of $333 million of FluidStack’s lease obligations in support of project-related debt was highlighted.
Cipher maintains a growing pipeline of approximately 3.2 gigawatts (GW) being prioritized for HPC, indicating a strong focus on further development and expansion in this sector.
In terms of advisors, Morgan Stanley & Co. LLC acted as the sole financial advisor to the company, while Davis Polk & Wardwell LLP acted as legal counsel to the company, and Cooley LLP acted as legal counsel to FluidStack.
Cipher Mining Inc. is a company focused on the development and operation of industrial-scale data centers for Bitcoin mining and HPC hosting. The company aims to be a market leader in innovation, including in Bitcoin mining growth, data center construction, and as a hosting partner to the world's largest HPC companies.
This expansion and the financial details provided in the announcement showcase the significant growth and potential of Cipher Mining Inc.'s partnerships and operations in the HPC and data center space. Following these announcements, the company's shares moved 2.7%, and are now trading at a price of $15.0151. If you want to know more, read the company's complete 8-K report here.
