crypto mining saw a surge early Thursday after revealing a deal to completely lease Barber Lake’s data center located in Colorado City, Texas.
This agreement also involves transitioning from another miner to a computing provider, which is noteworthy. There’s a previous deal with Fluidstack that ties into this.
The market seems to have reacted positively. But, I should mention that this agreement illustrates the rather convoluted financial structures that are cropping up alongside the massive investments in the AI sector.
For instance, on Thursday, Cipher also made an announcement.
google received an interest in approximately 5.4% of Cipher’s common stock. (Interestingly, those warrants have become much more valuable lately, given that Cipher mining is seeing significant profits.) Additionally, Google is supporting Fluidstack’s borrowing efforts for a $1.4 billion expansion.
But, as one digs deeper, the situation grows increasingly complex. Alphabet, you see, is effectively Cipher Mining’s main client and essential guarantor. If the warrants were converted, they might end up holding substantial ownership, exceeding 5%.
However, as far as this transaction goes, the financial complexity can’t be overlooked. Historically, there has been a tendency to obscure the real levels of financial risk accruing during these overly optimistic periods.
