Cipher Mining, a Bitcoin mining firm that is expanding its operations into artificial intelligence, announced today a significant 15-year lease agreement with Amazon Web Services (AWS). This agreement is valued at $5.5 billion and will provide space and power for AI workloads.
The announcement was made during the company’s third-quarter report, and it led to Cipher’s stock jumping more than 30% in early trading, reaching $24.22 before settling at $22.80, still representing a 22% increase.
According to the press release, Cipher is set to supply 300 megawatts (MW) of capacity in 2026. This capacity will utilize both air- and liquid-cooled racks. The delivery of this capacity is scheduled to begin in July and conclude by the end of the year, with rent payments commencing in August.
New Project to Expand Cipher’s AI Footprint
In addition to the AWS lease, the company also unveiled a new joint project named “Colchis.” This initiative involves a 1-gigawatt (GW) site located in West Texas, which will be dedicated to high-performance computing (HPC) data centers. Cipher will be the primary funder for this project, retaining approximately 95% ownership. The chosen site spans 620 acres and is strategically positioned near an American Electric Power substation, granting it a direct connection agreement with the utility company.
“The third quarter was truly transformative for Cipher,” stated CEO Tyler Page in the release. “We executed a pivotal transaction with Fluidstack and Google, which firmly established our credibility in the HPC space. We are now following that transaction with another major step forward by signing our first direct lease with a Tier 1 hyperscaler.”
Strong Earnings and Growing AI Contracts
Cipher reported a revenue of $72 million for the quarter. The company incurred a net loss of $3 million, or $0.01 per share, while its adjusted earnings stood at $41 million.
The company indicated that its AI hosting contracts have now reached a total value of approximately $8.5 billion. This figure includes a previously disclosed $3 billion deal with Fluidstack and Google. During the same period, Cipher also successfully completed a convertible note offering totaling $1.3 billion. The company’s current pipeline for site capacity now extends to 3.2 GW.
“As the industry evolves rapidly and validates our thesis that Tier 1 hyperscalers would turn to Cipher and to non-traditional areas in Texas, we’re more confident than ever that Cipher is among the best-positioned companies in the world,” Page added.
Bitcoin Miners Join the AI Rush
This development represents yet another instance of crypto mining firms venturing into the AI market. Many Bitcoin miners, including IREN, are pivoting towards AI computing, leveraging their existing power supply and facilities that are suitable for such operations.
Earlier today, IREN announced a $9.7 billion AI cloud deal with Microsoft. Following this announcement, the firm’s stock experienced a surge of almost 30% during early trading hours, reaching $78.02.
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