This article was first published on The Bit Journal: What is the potential endgame of the ongoing Google-backed financing targeting crypto mining firms? Read onThis article was first published on The Bit Journal: What is the potential endgame of the ongoing Google-backed financing targeting crypto mining firms? Read on

The Secret Behind the Ongoing Google-Backed Financing to Bitcoin Mining Firms

This article was first published on The Bit Journal: What is the potential endgame of the ongoing Google-backed financing targeting crypto mining firms? Read on to find out.

A number of crypto infrastructure companies have gotten access to large-scale, Google-backed financing. The project has helped several crypto mining firms move towards AI-powered data centers to address post-halving pressure on their core businesses.

According to Bitcoin and AI miner Hut8 (HUT), the firm recently inked a $7 billion, 15-year AI infrastructure lease with Fluidstack to receive 245 megawatts of IT capacity for its River Bend plant in Louisiana. The agreement grants Fluidstack a Right of First Offer (ROFO) for up to an additional 1,000 megawatts of IT capacity as the campus expands. The Google-backed financing program will step in to significantly reduce counterparty risk, with Hut8 expected to deliver cumulative net operating income of $6.9 billion over 15 years, or around $454 million per year.

AI-powered data centersCipher signed a new 10 year HPC hosting agreement with Fluidstack that adds 56 MW of additional capacity at the Barber Lake site

Google acts as a Co-signer

The Google-backed financing deal, targeting several crypto mining firms and valued at at least $5 billion, is said to be one of the largest commitments ever made by publicly listed Bitcoin miners. Google isn’t directly involved in leasing AI-powered data centers or in operating crypto mining. Rather, it acts as a co-signer with the Google-backed financing, offering a financial backstop that guarantees lease payments and certain pass-through obligations for the 15-year base term.

Commenting on the development, Hut8 CEO Asher Genoot stated in a press release:

Google backed financingGoogle will benefit by getting access to AI-powered data centers.

Google will get 5.4% Equity as Part of the Deal

Another beneficiary of the Google-backed financing program is TeraWulf, which inked a similar deal for its Lake Mariner campus in New York. The Bitcoin miner is currently undertaking a gigantic expansion plan targeting a 360-megawatt upgrade, with $6.7 billion in contracted revenue, potentially reaching $16 billion with extensions. According to available data, Google-backed financing increased the backstop to $3.2 billion and boosted its warrant-derived stake to approximately 14%.

Also, Google-backed financing is said to have played a role in Cipher Mining’s AI-powered data center pivot. An announcement by the company recently stated that it had secured a 10-year high-performance computing deal with Fluidstack, which also included Google-backed financing for a 168-megawatt AI hosting agreement at its Barber Creek site. According to Cipher, Google will receive warrants that are equivalent to a 5.4% equity stake in Cipher as part of the deal.

Conclusion

While the Google-backed financing program doesn’t necessarily involve direct financing, it provides a financial guarantee to AI-powered data center operators like Fluidstack. These AI computing companies lease their data center capacities to Bitcoin miners who wish to power AI and high-performance computing workloads. Google stands to gain access to existing large-scale data center sites offering high-voltage power connections and “energized land,” which are critical and scarce resources for running energy-intensive AI model training.

Glossary to Key Terms

Google-backed financing: A specific type of financial arrangement where Google provides a financial guarantee for data center lease agreements between a cloud infrastructure firm (Fluidstack) and several Bitcoin mining companies.

Crypto mining: The process where powerful computers solve complex math problems to verify transactions, add them as new “blocks” to the blockchain

AI-powered data centers: A specialized facility built for intensive AI workloads, using supercharged hardware (GPUs/TPUs), advanced liquid cooling, massive power, and high-speed networking to train complex models (LLMs) and run AI applications.

Frequently Asked Questions about Google-backed financing

Does Google offer direct loans for Bitcoin mining?

No, Google does not offer direct loans or financing specifically for traditional Bitcoin mining. Its financial involvement is structured as a guarantee of lease payments for its partner, the AI cloud platform Fluidstack.

Why is Google involved with Bitcoin mining companies?

Google’s primary interest is in securing access to the vital infrastructure—specifically energized land and high-capacity power connections—that these mining companies already possess, to meet the exploding demand for AI and HPC compute power.

Are these funds used for Bitcoin mining operations?

The financing is intended to fund the conversion and expansion of existing facilities into AI-ready data centers, not to subsidize the day-to-day costs of Bitcoin mining.

References

Hut8com

Global News Wire

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