Google has committed to underwrite $1.4 billion of AI computing startup Fluidstack’s $3 billion contract with Cipher Mining over a decade. Additionally, Google will have the option to purchase a 5.4% stake in Cipher, as per the announcement made by Cipher.
This partnership follows a similar agreement between Google, Fluidstack, and Cipher in the preceding months, reflecting the increasing demand for computational resources to drive AI services. Google’s substantial investment in computing capacity in Silicon Valley, which amounts to billions annually, includes collaborations with emerging AI cloud experts like Fluidstack.
While Google primarily focuses on its internal data centers, it has begun partnering with AI cloud specialists such as Fluidstack, akin to Microsoft, to access additional computing power.
The collaboration with Cipher is part of Google’s strategy to work with data center colocation providers to bring cloud technologies closer to global customers, according to a Google spokesperson.
Cipher, known for its use of data centers in cryptocurrency mining, intends to leverage Google’s support to secure loans for expansion. The contract includes provisions for two potential five-year extensions, potentially generating an additional $4 billion in revenue, as reported by Cipher.
Cipher has earmarked 168 MW capacity from a Texas-based site, scheduled for completion by September 2026, with the potential for a 500 MW expansion, the company disclosed.
The growing demand for “neocloud” operators offering additional computing resources to drive artificial intelligence has led to increased investment in high-performance data centers. Companies previously involved in crypto mining, with existing infrastructure, are now sought after for such investments.
Google’s deal with TeraWulf, a cryptocurrency mining data center operator, mirrors its agreement with Cipher and Fluidstack. Google’s involvement includes acquiring warrants for up to 14% ownership in TeraWulf and supporting a decade-long Fluidstack contract for capacity acquisition.
Earlier this year, Fluidstack, a UK-based startup, announced plans to participate in the construction of a €10 billion “supercomputer” in France, despite its limited operating history.
FluidStack, acting as a neocloud intermediary, leases high-performance computing capacity from data center operators to offer it to clients like Google. By securing reputable clients like Google, Fluidstack can guarantee data center contracts.
