Google provides $4.6 billion in credit guarantees to support two Bitcoin mining companies' transition to AI infrastructure

On September 25, US Bitcoin mining company Cipher Mining signed a 10-year high-performance computing (HPC) hosting agreement with AI cloud service provider Fluidstack. The initial contract value of the agreement is approximately $3 billion, with two five-year renewal options. If fully exercised, the total contract value is expected to reach $7 billion.

Google guaranteed Fluidstack's $1.4 billion lease obligations to support debt financing related to the project and received approximately 24 million warrants for Cipher common stock, representing approximately 5.4% of the pro forma equity (after accounting for the newly added shares and dilution).

Cipher stated that it will retain 100% ownership of the project and plans to raise funds flexibly through the capital markets.

Cipher Mining, a Nasdaq-listed company, initially focused on Bitcoin mining and is now transitioning to an AI data center developer. Its stock price has risen sharply this year, from $1.86 to over $15, but after the announcement of the $3 billion contract on September 25, it fell by over 17% that day. The company's current market capitalization is approximately $4.586 billion.

Cipher also announced it was increasing the size of its planned $800 million zero-coupon convertible bond issuance to $1.1 billion. The bonds, with a zero coupon rate and due in 2031, will be used for project construction and general corporate purposes.

Notably, Google has previously adopted a similar approach to support mining companies' transition to AI infrastructure. On August 18, TeraWulf expanded its partnership with Fluidstack, adding 160 megawatts of critical IT load in a new CB-5 facility at its Lake Mariner campus in New York, bringing the total contracted capacity to 360 megawatts, with expected commissioning in the second half of 2026.

Google provided an additional $1.4 billion in credit support, increasing its total guarantee for the project to approximately $3.2 billion, and received 32.5 million warrants for TeraWulf common stock, increasing its pro forma stake from 8% to approximately 14%.

TeraWulf is a digital asset technology company focused on digital infrastructure and sustainable energy, primarily generating revenue from Bitcoin mining.

It is also listed on the Nasdaq. Since announcing its partnership with Fluidstack, its stock price has risen by over 100%, with a current market capitalization of approximately $4.475 billion.

Company management also revealed plans to raise approximately $3 billion for data center construction. The transaction, led by Morgan Stanley, is expected to begin as early as October and may be financed through high-yield bonds or leveraged loans.

Through its support for Bitcoin mining companies Cipher Mining and TeraWulf, Google has provided a total of $4.6 billion in credit guarantees and has become a significant shareholder in both companies. These moves do not signal Google's intention to enter the Bitcoin mining industry, but rather aim to help these companies transform into AI infrastructure providers.

As AI technology drives a surge in computing power, GPUs, stable power supplies, and large data center facilities have become scarce, leading to an increasing shortage of data center resources. Consequently, many AI companies are seeking partnerships with mining companies that offer power and space advantages, with TeraWulf and Cipher being prime examples.

Through these collaborations, Google has, on the one hand, strengthened its strategic layout in the field of AI data centers, and on the other hand, promoted the deep integration of traditional mining companies and the cloud AI industry chain to jointly cope with the growth of future computing needs.