Key Insights
- •MARA has partnered with MPLX to develop integrated power generation and data center campuses in the Delaware Basin, utilizing natural gas resources.
- •The initial capacity of 400 MW can scale up to 1.5 GW, offering flexibility for Bitcoin mining, grid sales, and AI/HPC hosting.
- •This move aligns with an industry-wide trend where companies like Core Scientific, IREN, Cipher, TeraWulf, and Applied Digital have secured significant AI hosting contracts totaling over $30 billion.
MARA Announces Collaboration with MPLX
Bitcoin miner company MARA has announced a collaboration with MPLX to develop integrated power generation and data center campuses in West Texas. This initiative is designed to support Bitcoin mining, AI/HPS workloads, and other compute-intensive applications. The partnership leverages MPLX’s Delaware Basin natural gas resources to provide digital energy infrastructure, ensuring reliable and scalable power and compute solutions.
Matthew Sigel, head of digital assets research at VanEck, highlighted the significance of this initiative, noting its reliance on MPLX’s Delaware Basin natural gas resources to create essential digital energy infrastructure.
Flexible Energy Infrastructure for Bitcoin Mining and Beyond
Under the terms of the agreement, MARA will construct and operate multiple power-generating facilities and data centers strategically located across the Delaware Basin. The initial phase of this infrastructure will offer approximately 400 MW of capacity, with provisions for scaling up to 1.5 GW. These facilities are designed with a long asset life of 20 to 30 years and multiple offtake options, aiming to secure cost-effective and long-term energy access. This flexibility allows for diverse applications, including Bitcoin mining, grid sales, and AI/HPC workloads.
MARA's third-quarter reports indicated that the company was evaluating the deployment of modular AI/HPC solutions alongside its mining operations to maintain strategic flexibility. The West Texas project is specifically framed as "energy-to-compute" infrastructure, aiming to convert energy into intelligence from the molecular level to megawatt power and ultimately to compute power. This partnership with MPLX is a key component of MARA’s broader strategy to optimize its energy deployment through compute, sales, or tolling arrangements, while securing strategic power access in regions rich with low-cost energy resources.
Industry-Wide Shift Toward AI Hosting Revenue
MARA's strategic pivot reflects a significant transformation occurring across the US Bitcoin mining sector. Many companies are repurposing or reserving substantial amounts of power capacity for AI workloads, specifically for liquid-cooled GPU halls. This industry-wide shift has led to multiple operators securing long-term, multi-billion-dollar contracts for hosting high-performance compute workloads.
Core Scientific has substantially converted its capacity to AI hosting through its partnership with CoreWeave. This move has expanded its 12-year HPC backlog to approximately $8.7 billion and added about 120 MW of incremental delivery capacity. This transition demonstrates how established mining infrastructure can be directly repurposed for hyperscale data center needs.
IREN has entered into a five-year, $9.7 billion cloud-capacity deal with Microsoft and a $5.8 billion equipment pact with Dell. These agreements are for the deployment of approximately 200 MW of liquid-cooled GPU halls at its Childress, Texas campus. Microsoft’s prepayment of 20% of the contract value underscores the high demand and tight supply for GPUs. This arrangement clearly signifies a strategic shift away from potential Bitcoin mining build-outs towards contracted AI workloads.
Multi-Billion Dollar Commitments Reshape the Bitcoin Mining Sector
Cipher Mining has secured a 10-year, 168 MW AI-hosting contract with Fluidstack, valued at approximately $3 billion. Google has provided a significant boost to this deal by backstopping roughly $1.4 billion of Fluidstack’s obligations and acquiring a minority stake, thereby reducing counterparty risk through credit enhancement.
TeraWulf has also expanded its partnership with Fluidstack, entering into long-dated AI-hosting commitments. The company has disclosed details of agreements totaling over 200 MW across 10-year terms, which are expected to generate approximately $3.7 billion in revenue.
Applied Digital, a US operator that originated from the crypto infrastructure space, has also significantly pivoted towards developing AI factories. The company has secured two 15-year leases with CoreWeave, totaling approximately $7 billion, for up to 400 MW of capacity in North Dakota.
Power Strategy Template Enables Flexibility
Riot Platforms, while maintaining its primary focus on Bitcoin mining, has established a power strategy template that other operators can adopt and monetize. The company has secured fixed-price power purchase agreements and actively participates in ERCOT demand-response programs, 4CP, and curtailment credit schemes. These strategies have effectively lowered its net power costs and provided the flexibility to reallocate capacity as market signals evolve.
Matthew Sigel has noted that Bitcoin infrastructure providers involved in selling electricity and electrical equipment have experienced significant positive impacts on their earnings per share growth and valuation multiples. He specifically highlighted utilities operating in regions where Bitcoin mining has expanded, such as Entergy, as companies that have raised their load growth forecasts and are investing to meet market demand.
The combination of access to low-cost power and the high-value proposition of AI workloads creates compelling economic incentives for Bitcoin mining companies to maintain dual-use optionality. MARA’s West Texas initiative aligns with this strategic approach, aiming to reduce Bitcoin unit power costs through long-term natural gas access while retaining the capacity to shift towards higher-revenue AI/HPC hosting when market conditions are favorable. Based on current industry trends, this strategic flexibility allows companies to optimize their returns by capitalizing on real-time price signals between cryptocurrency mining rewards and data center hosting rates.