Cipher Digital has doubled the contracted life of its Barber Lake data center in Colorado City, Texas, from 10 years to 20, a move the company says lifts total contracted revenue at the single campus from $3.8 billion to more than $9 billion.
The company announced the transaction on Sept. 25 and disclosed its terms the same day in a filing with the Securities and Exchange Commission. Two agreements are involved, both executed Sept. 24. Cipher amended its existing lease with Fluidstack USA II Inc., the AI cloud operator that has held the Barber Lake lease since September 2025, and separately signed a binding commitment with what it describes only as “a leading AI lab” to take the facility for a further 10-year term once the Fluidstack lease runs out.
The second lease is expected to carry economic terms “substantially consistent” with the first and to generate roughly $5.2 billion in incremental contracted revenue, according to the filing. Cipher has not named the AI lab.
A cost-overrun framework comes with the extension
On our reading, the third piece of the deal is the most consequential for anyone financing data center construction. Cipher, Fluidstack and the unnamed AI lab established what the filing calls a cost reimbursement framework, under which Cipher absorbs the first $359.3 million of costs above the lease’s original budget. Above that line, the tenant reimburses half of the excess over the full 20-year term, paid as additional rent and calculated to give Cipher a contracted rate of return on the reimbursed amounts.
Few data center leases spell out in public what happens if the build runs long. Development costs across the sector have been climbing steeply; Cushman & Wakefield has put the increase at 21% per megawatt since 2024.
Cipher also agreed with Fluidstack to tenant-modification change orders altering the building’s design, and to a revised handover timetable. Individual data halls are now expected to be delivered between the fourth quarter of 2026 and the first quarter of 2027, with rent starting on each hall as it is turned over. The company had previously told investors it expected to deliver the facility in September 2026.
What Barber Lake is
Barber Lake sits on a site in Colorado City, in West Texas. Under the original September 2025 agreement, Cipher committed to deliver 168 megawatts of critical IT load supported by up to 244 megawatts of gross capacity, on a property with 587 acres of surrounding land and room, the company said at the time, for 500 megawatts of further expansion. That first lease ran 10 years with two five-year extension options and was valued then at about $3 billion, or roughly $7 billion if both options were exercised. The $3.8 billion figure cited this week reflects the contract as it stood before the new commitment.
Google is already financially entangled in the project. In exchange for Google agreeing to backstop $1.4 billion of Fluidstack’s obligations under the lease β support that helped Cipher raise project-level debt β Cipher issued Google warrants to buy 24,178,576 shares at a penny apiece, a stake the company described as about 5.4% on a pro forma basis. Cipher’s most recent quarterly report notes that if the warrant shares are worth less than $430 million when the exercise period opens, Cipher must make up the shortfall in additional shares or cash.
Chief Executive Tyler Page framed the extension as evidence that the asset will outlast its first tenant. “Extending Barber Lake’s contracted life from 10 to 20 years and adding approximately $5.2 billion of contracted revenue reflects the enduring value of the infrastructure we’re building,” he said in the announcement. “Barber Lake was designed as a long-lived, mission-critical asset, and securing a firm commitment that extends well beyond the original lease term demonstrates the long-term utility and strategic relevance of the campus.”
A bitcoin miner rebuilt as a landlord
Cipher, renamed from Cipher Mining and still trading on Nasdaq as CIFR, is one of several former bitcoin-mining companies converting energized industrial sites into leased computing capacity. Alongside Barber Lake it operates a 207-megawatt mining facility in Odessa, Texas, and is retrofitting a 300-megawatt site in Wink, Texas, for a separate investment-grade hyperscale tenant under a 15-year lease signed in October 2025. Six more sites in its portfolio are earmarked for high-performance computing build-out.
Much of that construction is debt-funded. Cipher issued $1.3 billion of zero-coupon convertible notes due 2031 in September 2025, partly to pay for Barber Lake, and arranged a $200 million revolving credit facility with Morgan Stanley Senior Funding in March. Amortization on its secured notes does not begin until Barber Lake is finished. In the first half of 2026 the company spent $746 million more on property and equipment than a year earlier, almost entirely on Barber Lake and the Wink site.
Long-dated leases signed against contracted revenue have become the standard financing template for AI campuses in Texas β Galaxy Digital priced a $3.5 billion bond deal this summer against CoreWeave’s 15-year commitment at a Dickens County site. Cipher’s twist is a second tenant lined up a decade before the first one leaves, which converts a 10-year cash-flow story into a 20-year one before the building has opened.
The counterweight is that the building is not yet delivered and the follow-on tenant is unidentified. More sector coverage is collected on RealtyWire’s Technology & AI page.
