Google is quietly becoming the 'architect' behind the pivot to AI by Bitcoin miners, not through acquisitions but via large-scale credit guarantees.
Instead of acquiring mining companies, the Alphabet group has provided at least $5 billion in credit guarantees announced for a group of AI projects by BTC miners. Although the market often refers to this as 'technology collaboration', the structural nature is closer to financial engineering than a technology alliance.
Google's backing helps reposition mining companies – previously unrated – as partners that banks can view as infrastructure sponsors rather than pure commodity producers.
Operational mechanisms
The transaction structure is relatively simple.
BTC miners contribute electrified land, high-voltage connections, and infrastructure. Fluidstack, a data center operator, signs long-term co-location leases with these companies for 'critical IT loads', meaning the electricity supplied for AI servers.
Google guarantees Fluidstack's lease obligations, thereby paving the way for cautious commercial banks to underwrite the project as infrastructure debt rather than speculative crypto-linked financing.
Typical transactions
TeraWulf sets a structural precedent at the Lake Mariner site in New York.
After the initial phase, the company announced a significant expansion, raising the total contracted capacity to over 360 MW. TeraWulf values the deal at $6.7 billion in signed revenue, and it could reach $16 billion if extended.
The key point is that Google raised the guarantee level to $3.2 billion and increased ownership stakes through warrants to about 14%.
Google's role is also evident in Cipher Mining's AI pivot.
Cipher signed a 10-year AI hosting contract, with a capacity of 168 MW, with Fluidstack at Barber Creek. Although the company promotes this as approximately $3 billion in signed revenue, the core financial driver lies in Google's guarantee of $1.4 billion in lease obligations. In return, Google receives warrants that can convert into about 5.4% of Cipher's equity.
Hut 8 Corp. continues to expand this model on December 17, announcing a 15-year lease with Fluidstack for 245 MW of IT load at the River Bend site in Louisiana.
The total contract value reaches $7 billion. Market sources and corporate announcements confirm that JPMorgan and Goldman Sachs are structuring project financing, which is only possible when Google acts as 'financial guarantor' for the lease obligations.
Why AI contracts are more attractive than bitcoin mining profit margins
This structural pivot stems from weakened mining economics.
According to CoinShares, the average cash cost to produce 1 BTC for listed miners is around $74,600, while the total cost – including depreciation – is nearly $137,800.
In the context of BTC trading around $90,000, the profit margins of pure miners have been significantly compressed, forcing the board to seek more stable cash flows.
The destination is AI and high-performance computing. CoinShares reports that public miners have announced over $43 billion in AI and HPC contracts in the past 12 months.
With this structure, banks can underwrite AI power lease contracts of 10–15 years as recurring revenue and check against debt service coverage ratios. In contrast, income from bitcoin mining fluctuates with network difficulty and block rewards, factors that most lending institutions prefer not to rely on.
Google's role is as a bridge. As a credit enhancement party, Google reduces perceived risk, allowing miners to access capital at costs closer to those of traditional data center developers.
From Google's perspective, this structure optimizes capital efficiency. Instead of bearing the entire cost of building out data center shells or waiting for connection queues, the company ensures long-term access to readily available power for computation through Fluidstack while retaining growth options through equity warrants in the miners.
Operational risks and partner chain
Although the financial logic is compelling, the operational rollout carries significant risks.
Bitcoin miners are optimized for cheap electricity and can flexibly cut back. In contrast, AI customers demand data center standards, including strict environmental controls and tight service level commitments.
The transition from 'maximum effort' mining to near-continuous reliability requires a profound change in operational culture and physical infrastructure. If cooling retrofit costs exceed budget or connection upgrades are delayed, the consequence will be contract violations rather than opportunity costs.
This structure also creates a high level of partner concentration.
The economic chain relies on Fluidstack as an intermediary. Cash flow is based on Fluidstack’s ability to retain AI tenants and, ultimately, on Google's decade-long guarantee commitment.
If the AI hype cycle cools off or tenants push to renegotiate, the chain could become the only bottleneck. Miners are essentially betting on Google continuing to be the 'last backer', while legal claims go through intermediaries.
Long-term consequences
The impact of these deals extends beyond project financing, touching on competitive policy and the long-term security budget of Bitcoin.
By relying on credit guarantees instead of directly purchasing assets, Google can consolidate access rights to electrified land and capacity – the scarcest inputs in the AI construction wave – without triggering merger reviews.
If this model scales across multiple regions, critics may argue that Google has created a form of 'virtual utility': not owning the buildings but still controlling who gets to deploy large-scale computation on those power grids. At that point, regulators might need to consider whether long-term control of AI capacity, even through lease contracts, requires stricter antitrust oversight.
With Bitcoin, the trade-off is quite clear. Each megawatt shifted from mining to AI reduces the amount of electricity safeguarding the network.
The market once assumed that hashrate would increase nearly linearly with price as devices become more efficient and new capital flows in. However, if the most efficient operators shift the best sites to AI contracts, hashrate growth will be constrained and become more expensive, leaving a larger production share for lower-quality or 'stranded' power sources.