Alphabet Inc.’s Google has finalized a 10-year, $3 billion artificial intelligence (AI) hosting agreement with Bitcoin mining company Cipher Mining and U.K.-based AI computing startup Fluidstack, the companies announced. As part of the deal, Google will acquire a 5.4% equity stake in Cipher.
The tech giant struck the agreement in late September and committed to supporting $1.4 billion of Fluidstack’s lease obligations to fund potential expansions, according to a Cipher statement. The Bitcoin miner projects the contract will generate $3 billion in revenue over the initial decade, with two five-year extension options that could bring in an additional $4 billion.
The deal marks Google’s second partnership with Fluidstack since July, when the AI startup signed a 10-year leasing agreement with data center operator TeraWulf. Google backed $1.8 billion of that deal in exchange for 8% equity.
The agreements reflect a broader trend among major technology companies racing to secure AI computing resources amid surging demand. By leveraging existing cryptocurrency mining infrastructure, these firms can accelerate deployment while reducing capital investment requirements.
According to Bloomberg, Google ranks among Silicon Valley’s largest spenders on computing capacity. The company expects to allocate at least $85 billion to capital expenditures this year to meet growing AI infrastructure needs, or about $10 billion more than initially projected, CNBC reported.
However, the energy-intensive nature of AI training raises environmental concerns. Despite increasing adoption of renewable energy in the data center sector, 56% of electricity supplied to U.S. data centers still comes from fossil fuel sources, according to the Environmental and Energy Study Institute (EESI). The Department of Energy projects data centers could consume up to 12% of national electricity demand by 2028.
Water consumption presents another challenge. EESI reports that large data centers can require nearly 5 million gallons of water daily for cooling IT equipment and indirect electricity generation—equivalent to a town of approximately 50,000 residents.
Some environmental relief may come from the accelerating shift to clean energy. The International Energy Agency forecasts that renewable sources will meet nearly 50% of the data center sector’s electricity demand growth by 2030, suggesting a portion of these operations may eventually run on clean energy.
