Cipher targets $2B HPC data center funding as BTC mining profitability continues to slip

Cipher Mining has announced a $2 billion offering from its subsidiary Black Pearl Compute LLC to build a large data center in Texas. 

The funds are expected to go towards the construction of Cipher Mining’s Black Pearl Facility. The facility has a total power capacity of 300 megawatts (MW).

Why is Cipher Mining shifting focus from Bitcoin to high-performance computing?

Cipher Mining Inc. has announced that its wholly-owned subsidiary, Black Pearl Compute LLC, will offer $2 billion in senior secured notes to fund its AI ambitions. These notes are due in 2031 and will be sold in a private offering to large institutional buyers.

Cipher began as a Bitcoin miner, but it is now rebranding itself as a leader in industrial-scale data centers for high-performance computing (HPC). The $2 billion will pay for the remaining construction costs of the Black Pearl Facility located in Wink, Texas. 

It will also be used to reimburse Cipher Mining for approximately $232.5 million it already spent on the project. The rest of the money will go toward debt service reserves and various fees.

The Black Pearl Facility is an important part of Cipher’s future. The site covers 70 acres and has a total power capacity of 300 megawatts (MW). Phase I of the project, which provides 150 MW, became operational in 2025. 

Cipher’s decision to expand into HPC infrastructure is due to Bitcoin mining becoming less profitable. In early 2026, the global Bitcoin hashrate reached an all-time high, making it harder and more expensive for miners to earn rewards. 

Furthermore, Bitcoin’s “hashprice,” which measures the daily revenue a miner makes per unit of power, has continued to slip throughout the first quarter of 2026.

The 2024 halving event, which cut Bitcoin rewards in half, created a “harsh margin environment” that led to many public mining companies realizing that relying solely on Bitcoin was too risky in 2025 and 2026. 

By building data centers for HPC, Cipher Mining can sign long-term leases with large technology companies like Amazon, Google, and Microsoft.

In late 2025, the company signed a massive 15-year lease with Amazon Web Services (AWS) for 300 MW of capacity. That deal is estimated to bring in $5.5 billion in revenue over its term. Cipher also has a $3 billion hosting agreement with Fluidstack, which is backed by Google. 

Companies like TeraWulf and Core Scientific have also pivoted toward AI infrastructure. TeraWulf recently expanded its own Texas facility to manage AI workloads, and Core Scientific signed a multi-billion-dollar deal with CoreWeave. 

These companies are now being viewed by investors as traditional data center operators, which often trade at higher valuations because their income is more predictable.

What are the financial risks of the $2 billion debt offering?

The “Issuer” of the debt is Black Pearl Compute LLC. The debt is “senior secured,” meaning the lenders have a first-priority claim on the assets if things go wrong.

The notes are guaranteed by two other subsidiaries namely, Cipher Black Pearl LLC and 11786 Wink LLC, that own the actual land and equipment in Texas. The debt is backed by a lien on substantially all assets of these entities. Essentially, the Black Pearl Facility itself is the collateral for the $2 billion loan.

Cipher Mining Inc., the parent company, also promised lenders that if the $2 billion is not enough to finish the Texas facility, it will provide the extra money needed to get the job done on time. 

Despite the heavy debt and some recent price drops, as of February 2026, Cipher’s stock has returned 156% over the past year. Its latest quarterly reports from late 2025 showed a net loss, but management emphasized that their “adjusted earnings” remain positive because the Bitcoin mining side of the business still generates cash.

Because the debt notes are being offered under “Rule 144A” and “Regulation S,” they are only available to “qualified institutional buyers” and certain people outside the United States.

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