Cipher Digital (CIFR.US) is planning to raise capital through the issuance of $810 million in high-yield bonds to fund the construction of an artificial intelligence data center project in collaboration with Amazon.com (AMZN.US).

According to sources familiar with the matter, the proceeds from this bond offering will be primarily used to cover the remaining construction costs for the Stingray data center project. Located in West Texas, USA, the completed facility will be leased to Amazon under a 15-year long-term agreement.

This financing move further highlights how the high-yield bond market is becoming a crucial funding source for artificial intelligence infrastructure development. As hyperscale cloud providers like Amazon and Google's parent company Alphabet (GOOG.US, GOOGL.US) continue to expand their AI computing capacity needs, these tech giants are providing predictable cash flow to small and medium-sized developers through long-term data center lease agreements. This, in turn, enables these companies to secure billions of dollars in financing from debt markets.

Formerly known as Cipher Mining, Cipher Digital is a bitcoin mining enterprise. Amid the boom in AI data center construction, the company has been actively transitioning towards high-performance computing and data center operations in recent years.

In February of this year, Cipher raised $2 billion through the bond market to fund the construction of its Black Pearl data center project in Texas. That transaction was met with strong market demand, with orders exceeding $13 billion, demonstrating robust investor interest in AI infrastructure assets.

Compared to traditional cryptocurrency mining, data center projects leased to major tech firms like Amazon on a long-term basis offer more stable revenue streams and command higher valuation premiums. This is a key reason why capital markets continue to provide financing support.

The current bond offering is being jointly underwritten by Morgan Stanley, Goldman Sachs Group, Wells Fargo, Banco Santander, and SMBC Nikko Securities.

It is noteworthy that on the same day Cipher initiated its financing, Amazon was also marketing a bond offering of at least C$7 billion in the Canadian debt market, indicating that tech giants' capital expenditures in the AI infrastructure sector continue to expand.