SoftBank has invested in cryptomine data center firm Cipher Mining.
The deal gives SoftBank the option to acquire an undeveloped 300MW data center site in Texas that Cipher owns.
The investment would make the Japanese company a “significant primary investor” in Cipher.
The Nasdaq-listed crypto firm said the PIPE investment will support Cipher’s HPC data center development business.
“This investment comes at a pivotal moment in Cipher’s growth trajectory, as the company continues to attract attention for its pipeline of sites and innovative solutions in industrial-scale data centers,” said Tyler Page, Cipher’s CEO. “SoftBank’s focus on innovation in technology and AI development aligns with our vision to establish ourselves as a leader in HPC data center development.”
According to the SEC filing, the investment was made via SoftBank subsidiary Star Beacon LLC.
The filing also notes that Cipher agreed that, prior to February 28, 2025, it would not enter into binding definitive agreements on the sale of the company’s Barber Lake property with anyone other than SoftBank and its affiliates.
Barber Lake is a 250-acre site located near Colorado City, Texas. It could reportedly offer 300MW at full build-out.
Keefe, Bruyette, & Woods Inc. acted as financial advisor to the Company, and Latham & Watkins LLP acted as legal counsel to the company.
SoftBank - alongside Oracle and investment firm MGX - is heavily backing OpenAI’s ambitious Stargate data center project.
The $500bn venture aims to develop gigawatts of capacity to support OpenAI's needs. The first known project is set to see Crusoe (a crypto company pivoting to AI) developing a large-scale campus at a site in Abilene, Texas, owned by Lancium (another crypto-focused firm). The site will then be operated by Oracle, who will offer capacity to OpenAI.
DCD reached out to SoftBank for comment and to ask if the Barber Lake site is earmarked for the Stargate project. The company declined to comment.
Cipher was spun off from Bitcoin mining hardware giant Bitfury in March 2021 and went public via a merger with blank-check company Good Works Acquisition Corp.
According to its October 2024 earnings presentation, the company has some 327MW in operation across Texas, and a development pipeline totaling 2.3GW across six future sites in the state.
Cipher’s current portfolio includes cryptomining sites in Odessa and Alborz, and two other joint venture sites near Andrews, known as Bear and Chief.
As well as Barber Lake, the company recently acquired a development site known as Reveille in Cotulla that will initially offer 70MW, but is said to be scalable to 200MW. The company is also developing a site known as Black Pearl in West Texas that could offer 300MW.
The company’s October presentation also notes the Mikeska (500MW, outside Brady), Milsing (500MW, outside Houston), and McLennan (500MW, outside Waco) sites that are expected to energize in 2027.
Last year, Cipher was exploring a potential sale after receiving interest from companies looking to boost computing capabilities.
Cipher posted a net loss of $87 million in Q3 2024.
