Shares of Cipher Mining surged over 30% on Monday following the announcement of a landmark $5.5 billion agreement with Amazon Web Services. The deal signals a significant strategic shift for the Bitcoin mining company, which will now provide substantial infrastructure for artificial intelligence computing.
Key Takeaways
- Cipher Mining signed a 15-year, $5.5 billion lease with Amazon Web Services (AWS) to provide AI computing capacity.
- The agreement covers 300 megawatts of power and space, with delivery scheduled for next year.
- Cipher's stock (CIFR) jumped more than 30% in early trading following the news.
- The move reflects a growing trend of cryptocurrency miners repurposing their infrastructure to meet surging demand for AI data centers.
Details of the Amazon Partnership
Cipher Mining has entered into a 15-year lease agreement valued at $5.5 billion with Amazon's cloud computing division, Amazon Web Services. Under the terms, Cipher will supply 300 megawatts of computing capacity specifically for AI workloads.
The infrastructure is slated for delivery in 2026, and AWS will begin making rent payments in August of that year. This long-term contract provides a stable, high-value revenue stream for Cipher, diversifying its business beyond the volatile cryptocurrency market.
Deal by the Numbers
- Value: $5.5 billion
- Duration: 15 years
- Capacity: 300 megawatts
- Partner: Amazon Web Services (AWS)
Market Reacts Swiftly to AI Pivot
Investors responded with immediate enthusiasm to the announcement. Shares of Cipher Mining, traded under the ticker CIFR, climbed 31% to $24.35 in early trading on Monday. This significant jump adds to an already impressive year for the company, whose stock had more than quadrupled in value through Friday's close.
The excitement surrounding the company's future in AI has largely overshadowed its recent financial performance. For its third quarter, Cipher reported a net loss of $3 million on $72 million in revenue, which was driven primarily by its traditional Bitcoin mining operations.
"After ~18 months of waiting for hyperscalers to come into the arena, they are now here," wrote Cantor analyst Brett Knoblauch, who subsequently raised his price target on Cipher from $16 to $26.
A New Industry Trend Emerges
Cipher's move is part of a broader trend where companies with large-scale power and cooling infrastructure, originally built for cryptocurrency mining, are pivoting to service the booming AI industry. The immense computational power required for training and running AI models has created a massive demand for data center capacity that tech giants are struggling to meet on their own.
This strategic shift is proving lucrative for others in the sector as well. On the same day, fellow crypto miner IREN saw its stock rise 20% after announcing its own AI computing deal with Microsoft. These partnerships highlight how crypto mining infrastructure is becoming a critical asset in the global AI race.
From Bitcoin to Brainpower
Cryptocurrency mining and AI training share a common need: massive amounts of electricity and specialized cooling systems to run high-performance computer chips. This has made mining facilities prime real estate for AI companies looking to expand their capacity quickly.
Cipher's Expanding AI Footprint
The Amazon deal is not Cipher's first foray into the AI space. The company previously secured a 10-year hosting agreement with Fluidstack, an AI cloud platform backed by Alphabet's Google. As part of that arrangement, Google received warrants to acquire approximately 24 million shares of Cipher.
Cipher is also scaling up its physical infrastructure to support further growth. The company announced it is participating in a joint venture to develop a one-gigawatt data center site in West Texas. Cipher is expected to provide the majority of the financing for the project and will hold a 95% ownership stake.
With a large pipeline of power and new partnerships with the world's biggest technology firms, Cipher is positioning itself as a key infrastructure provider for the artificial intelligence revolution. Analysts believe more such deals could be on the horizon as the demand for AI computing power continues to grow exponentially.
