Google, Cipher Strike $3B AI Deal, Shifting from Bitcoin Mining
Google has struck a significant deal with Cipher Mining, focusing on AI and HPC, rather than Bitcoin mining. The tech giant is set to utilize data center infrastructure for AI applications, not investing in Bitcoin mining.
Cipher, operating data centers for Bitcoin mining and hosting HPC and AI applications, has signed a 3 billion USD contract with AI cloud provider Fluidstack. The deal, with potential extensions, could reach up to 7 billion USD. Google is financially securing this contract, covering 1.4 billion USD of Fluidstack's payment obligations to Cipher.
Under the agreement, Cipher will provide 168 MW of computing power at its Barber Lake site in Colorado City, Texas, for a decade. In return, Google receives options on approximately 24 million Cipher shares, representing about 5.4% of the company's total shares. The size of the options package is not publicly disclosed.
This deal confirms the shift of Bitcoin miners like Cipher towards AI, driven by the growing demand for computing power. AI companies can benefit from certain advantages of mining, such as smoothing out peak loads, utilizing excess energy, or avoiding energy waste.
Google's interest in Cipher's data center infrastructure signals a strategic move towards AI applications. The 3 billion USD deal, with potential extensions, underscores the growing demand for computing power in the AI sector. Cipher, originally a Bitcoin miner, is adapting to this shift, providing computing power for AI and HPC.
