TLDR
- Cipher Mining secured a $5.5 billion, 15-year lease with Amazon Web Services to provide AI infrastructure and power
- The agreement includes 300 megawatts of capacity delivery across two phases in 2026 with air and liquid cooling
- Cipher is developing a 1-gigawatt “Colchis” site in West Texas with 95% equity ownership
- Total AI hosting contracts now reach $8.5 billion including previous deals with Fluidstack and Google
- Stock surged 15% following the announcement as the company pivots from crypto mining to AI hosting
Cipher Mining shares rallied 15% on Monday after announcing a landmark agreement with Amazon Web Services. The $5.5 billion, 15-year lease positions the company as a major player in AI infrastructure.
The deal requires Cipher to provide turnkey space and power for AWS AI workloads. This represents one of the largest AI hosting agreements announced this year.
Cipher will deliver 300 megawatts of capacity during 2026. The infrastructure includes both air-cooled and liquid-cooled rack systems to support high-performance computing requirements.
Phased Delivery Timeline
The capacity rollout follows a two-phase schedule. Phase one begins in July 2026, with phase two completing by the end of the fourth quarter.
AWS will start paying rent in August 2026. This creates a predictable revenue stream for Cipher over the next 15 years.
The company is also launching a joint venture for a 1-gigawatt site in West Texas. The facility, named “Colchis,” will serve future high-performance computing needs.
Cipher will finance most of the Colchis development. This investment secures approximately 95% equity ownership in the joint entity.
Expanding AI Portfolio
This AWS agreement builds on Cipher’s existing AI infrastructure business. The company previously signed a 10-year hosting deal with Fluidstack and Google.
Combined, these contracts total approximately $8.5 billion in lease payments. The backlog provides long-term revenue visibility as AI demand accelerates.
Cipher reported third quarter results showing a net loss of $3 million. However, adjusted earnings came in at $41 million, or $0.10 per diluted share.
Capital and Capacity
The company completed a $1.3 billion convertible note offering to fund expansion. This capital supports the infrastructure buildout required for the AWS contract and future projects.
Cipher maintains a 3.2-gigawatt site capacity pipeline. The AWS commitment uses roughly 9% of this pipeline, leaving substantial room for additional contracts.
Liquid cooling capabilities are becoming critical for AI infrastructure. Modern AI chips generate significantly more heat than traditional data center equipment, making advanced cooling essential.
The shift from cryptocurrency mining to AI hosting reflects broader market trends. Several former crypto miners are repositioning to capitalize on surging AI infrastructure demand.
West Texas offers advantages for large-scale data operations. The region provides access to power infrastructure and favorable regulatory conditions for energy-intensive facilities.
The AWS deal validates Cipher’s strategic pivot to AI infrastructure. Hyperscale cloud providers are racing to secure power and space for expanding AI services.
Cipher’s 3.2-gigawatt pipeline positions the company for additional partnerships. Cloud providers and AI companies are actively seeking hosting solutions as data center capacity tightens.
The 15-year term of the AWS lease provides revenue stability. Long-term contracts are typical in data center infrastructure given the capital-intensive nature of development.
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