A former crypto miner is borrowing $810 million. Amazon is the reason lenders are saying yes.
From Bitcoin To Bandwidth
Cipher Digital used to be called Cipher Mining. It made its name mining cryptocurrency.
Now it builds data centers for the AI boom. The new deal shows how far that shift has come.
The shift makes sense. Crypto mining and AI both need cheap power and rows of humming machines.
The company is raising $810 million in junk bonds. Junk bonds are loans to riskier borrowers that pay higher interest to make up for the risk.
The cash will finish a site called Stingray. It is a 70-megawatt computing center in West Texas.
The Stingray site sits in Andrews, a small town in West Texas. Land and power are cheap there, which is why data centers keep landing in the state.
A megawatt is a unit of power. Seventy of them can run a serious stack of the heavy computers AI needs.
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Amazon Is The Safety Net
On its own, Cipher would be a shaky borrower. But Amazon has leased the whole Stingray site for 15 years.
That lease is what makes lenders comfortable handing over the cash.
Amazon went further than a normal tenant. It agreed to cover building overruns above a set limit and to back the deal as parent guarantor.
It is a bit like co-signing a loan. The borrower may be wobbly, but the co-signer is rock solid.
The lease also raises the rent over time. And it runs as a triple-net deal, so Amazon picks up most of the costs of running the site.
Big banks lined up to handle the sale. They include Morgan Stanley and Goldman Sachs.
That lineup is a sign of how much Wall Street wants a piece of AI financing.
Deals like this are spreading fast. A big tech firm signs a long lease, and a smaller builder borrows against it.
What To Watch
This is not Cipher's first trip to the well. Back in February it raised $2 billion for another Texas data center.
That deal drew more than $13 billion in orders. The gap between the ask and the offers showed how hungry the market is.
The pattern is bigger than one company. Big tech keeps renting space from smaller firms, and Wall Street keeps funding the work.
Amazon and Alphabet sign the leases. Smaller players like Cipher take on the debt and build.
The model lets tech giants grow without owning every building. It also hands the risk to firms like Cipher.
Investors cheered the news. Cipher's stock rose on the day.
The risk is real if AI demand ever slows. For now, a long Amazon lease is all the safety net lenders want.
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