Cipher Agrees to Assume ~$359M in First-Tier Over-Budget Costs for Barber Lake

Cipher has agreed, under a revised lease arrangement, to initially assume $359.3 million in first-tier costs exceeding the original budget for the Barber Lake project; beyond that threshold, the tenant will share half of the additional costs through extra rent over a combined 20-year contract term, with corresponding returns agreed upon. This figure is a contractual threshold, not the final total of project overruns, but it highlights the question of who bears the cost when delivery expenses rise after AI leases are signed.

Company management stated that the lease was signed before design had sufficiently progressed, leading to more change orders than expected, with alterations such as cooling facilities adding construction work and disrupting other processes; there were also productivity shortfalls, delayed equipment arrivals, and idle time, while equipment price increases themselves were not the main driver. The company said it will wait until design is approximately 30%–60% complete before signing the next generation of leases. Riot, Corsicana, and Core Scientific also disclosed related budgets and commitments: Riot said roughly 70% of its total budget may fall under a guaranteed maximum price framework with the general contractor, with estimates of approximately $11 million–$12 million per critical IT megawatt; Corsicana, under its new arrangement including tenant reimbursements and site work, estimates approximately $6 million per megawatt; Core Scientific disclosed outstanding purchase and construction commitments of approximately $4.4 billion, with CoreWeave-related retrofits almost entirely funded by the customer, and the company's own contributions capped.

[BlockBeats]