Cipher Mining Soars 32% Following $5.5 Billion Data Center Agreement with Amazon

Cipher Mining, a notable Bitcoin mining firm, experienced a dramatic increase of over 32% in its stock price following the announcement of a significant 15-year partnership with Amazon. This deal, valued at $5.5 billion, demonstrates the growing collaboration between major tech companies and cryptocurrency miners. In addition, Cipher reported a notable reduction in its net losses and a rise in adjusted earnings for the third quarter.

Key Takeaways

Cipher Mining's stock surged by 32% after announcing a $5.5 billion data center deal with Amazon Web Services.
The 15-year agreement focuses on providing space and power for AI workloads, set to begin in mid-2024.
Cipher reported a reduced net loss of $3 million for the third quarter, an improvement from the previous quarter’s loss.
Tech giants like Google and Microsoft are also forming partnerships with cryptocurrency miners, indicating a trend in the industry.

Cipher Mining's Partnership with Amazon

Cipher Mining's recent partnership with Amazon has solidified its position in the cryptocurrency mining sector. The 15-year lease agreement with Amazon Web Services is estimated to be worth $5.5 billion. Cipher will be responsible for supplying the necessary infrastructure and energy for AI workloads, with the project rolling out in two phases starting in July and August of next year.

Following this announcement, Cipher's stock recorded a substantial increase, jumping from $18.65 to $24.80 during trading on Monday, before closing at $22.76. The company's financial performance also showed improvement, narrowing its net loss to $3 million this quarter compared to a loss of $46 million in the previous quarter, as adjusted earnings grew to $41 million.

Source: Cipher Mining

Expanding Collaborations with Tech Giants

In addition to its Amazon deal, Cipher Mining has also partnered with Google, which bought a 5.4% stake as part of a $3 billion, multi-year data center agreement involving AI services through Fluidstack. Cipher's CEO, Tyler Page, emphasized the significance of these transactions for enhancing the company's credibility in the High-Performance Computing (HPC) sector.

Cipher has also secured a majority stake in a joint venture to create a one-gigawatt AI hosting facility in West Texas, named Colchis, where it will provide most of the financing and own 95% of the equity.

Increasing Interest from Tech Companies

The trend of tech giants partnering with Bitcoin miners has become increasingly prevalent this year. Recently, IREN, another Bitcoin mining company, signed a multi-year agreement with Microsoft valued at around $9.7 billion for GPU cloud services. Similarly, TeraWulf announced a $3.7 billion hosting agreement with Fluidstack, which is supported by Google’s parent company, Alphabet.

As cryptocurrency miners adapt to changing market conditions, such collaborations with renowned technology firms are likely to shape the future of the industry.