Cipher Mining to issue senior secured notes for $1.4B, extending fundraising push

Cipher is attempting to raise $1.4 billion for its new Barber Lake data center. The mining firm is diversifying its portfolio and making an entrance into the AI industry with the construction of the data center. 

Cipher Mining Inc. has announced plans to issue $1.4 billion in senior secured notes due in 2030. This will help fund the company’s entrance into the artificial intelligence (AI) and high-performance computing (HPC) industries.

$1.4 billion notes to fund new Texas data center 

According to a statement released on Tuesday, Cipher’s wholly owned subsidiary, Cipher Compute LLC, will handle the offering, which will be made privately to qualified institutional buyers under Rule 144A of the U.S. Securities Act of 1933.

The proceeds will be used to finance part of the construction of the Barber Lake Facility, a major data center project near Colorado City, Texas. This site will support Cipher’s shift to AI and cloud infrastructure from Bitcoin mining.

The notes will be guaranteed by Cipher Barber Lake LLC, which is fully owned by Cipher. They will also be secured by top-priority claims on most of the assets owned by the issuer and guarantor, by the shares that Cipher Songbird LLC holds in Cipher Compute, and by funds in an account managed by Fluidstack USA II Inc.

Before completion of the Barber Lake project, Google LLC will also pledge warrants to purchase Cipher stock as part of the note guarantee. Cipher will provide a completion guarantee to ensure the Barber Lake Facility is finished even if note proceeds and other funds fall short.

The offering remains subject to market conditions and regulatory approvals, so there’s no assurance on the timing or final terms. Cipher also emphasized that the notes are unregistered securities and cannot be sold publicly in the United States without proper registration or an exemption.

Moving from crypto mining to AI data centers

Cryptopolitan reported in late October that Cipher announced a $5.5 billion, 15-year lease agreement with Amazon Web Services (AWS). Under the deal, Cipher is expected to provide 300 megawatts of capacity at its facilities for AWS’s AI operations, featuring both air- and liquid-cooled systems. Operations are set to begin in mid-2026, with lease payments starting in August that year.

Following the announcement, Cipher’s shares surged by more than 19% in early trading, making it one of the top-performing Nasdaq-listed firms connected to the AI infrastructure boom. The partnership is one of the many that large tech firms such as Amazon, Google, and Microsoft have made. These firms are turning to specialized data center operators to secure scalable, energy-efficient capacity for AI computing.

Cipher’s CEO, Tyler Page, said the partnership proves that major tech companies, which are often called “Tier 1 hyperscalers,” see Cipher as a trusted provider for their data infrastructure. The AWS deal adds to Cipher’s existing partnerships with Google and Fluidstack, bringing the total value of its AI-related hosting and lease agreements to around $8.5 billion.

Cipher is also planning to launch a new project called the Colchis development, which is set to be built in West Texas. The project will add 1 gigawatt of capacity over a 620-acre site connected to the American Electric Power grid. The project is expected to go live in 2028 and will significantly boost Cipher’s total development pipeline to roughly 3.2 gigawatts.

Cipher’s third-quarter earnings showed a net loss of $3 million, which is an improvement from last year’s $86 million loss. This improvement and the predictability of long-term contracts have reassured investors about the company’s financial future.

The AWS deal will provide stability for Cipher and help generate stable, recurring revenue for more than a decade. Cipher will also gain independence from the unpredictable cycles of cryptocurrency mining.

Another miner, Iris Energy (IREN), recently signed a $9.7 billion hardware-supply agreement with Microsoft for AI cloud services, sending its stock up by over 20%.

Both firms are betting on the rapid global demand for AI computing capacity, which has far exceeded the availability of data center infrastructure.