Key Highlights
- Shares of Digi Power X (DGXX) climbed approximately 39% following the announcement of a Master Services Agreement with Cerebras Systems
- The partnership involves developing a 40 megawatt AI data center campus located in Columbiana, Alabama
- The initial agreement spans 10 years with an estimated value of $1.1 billion, potentially reaching $2.5 billion with renewals
- Development will proceed in two phases, with Phase 1 scheduled for completion by December 15, 2026
- Revenue generation is anticipated to commence in late 2026, with full operational capacity expected by Q1 2027
Shares of Digi Power X (DGXX) experienced a significant rally on Tuesday, climbing approximately 39% after the company unveiled a substantial colocation partnership with Cerebras Systems, a prominent AI chip manufacturer.
The partnership encompasses the development of a specialized 40-megawatt AI data center campus situated in Columbiana, Alabama. Under the initial 10-year arrangement, the contract carries an estimated value of roughly $1.1 billion.
When factoring in potential renewal options, the total contract value could escalate to $2.5 billion. This agreement provides Digi Power X with substantial long-term revenue predictability starting from the commencement of operations.
The development plan is structured around two distinct phases. The initial phase encompasses 15 MW of IT capacity, while the second phase will contribute an additional 25 MW, culminating in a total capacity of 40 MW.
The infrastructure will adhere to Tier III standards. These specifications are tailored explicitly to accommodate the high-density thermal requirements of cutting-edge AI accelerator technology ā precisely the type of computational workloads that Cerebras operates.
Phase 1 construction is launching without delay. Notably, Digi Power X will self-finance the Phase 1 construction efforts, a significant consideration given the project’s magnitude.
The organization has already finalized the on-site substation infrastructure for Phase 1. Grid connectivity has been secured, and a power supply arrangement with Alabama Power has been established.
The Columbiana location was selected based on its robust power infrastructure, favorable regulatory framework, and strategic access to major fiber network routes throughout the southeastern region. Digi Power X holds ownership of the property where the facility will be constructed.
Expected Revenue Schedule
Phase 1 aims for a Ready-for-Service milestone of December 15, 2026. Complete deployment encompassing both phases is projected for completion by the conclusion of Q1 2027.
Revenue generation from this partnership is forecast to begin in late 2026. Maximum revenue capacity is aligned with the completion timeline of the entire 40 MW infrastructure.
What Cerebras Gains From This Partnership
For Cerebras, this arrangement secures guaranteed data center infrastructure from day one of operations. Such operational certainty is crucial for an enterprise expanding frontier AI computing capabilities.
Cerebras Systems has established its reputation through large-format AI processors and computing platforms. The Columbiana facility was characterized as being engineered “from the foundation up” to address power density and reliability requirements.
The partnership structure delivers mutual advantages. Digi Power X secures a contracted revenue pipeline. Cerebras obtains dedicated, custom-built infrastructure without the necessity of undertaking real estate development independently.
DGXX is also listed on Cboe Canada under the ticker symbol DGX, which experienced approximately 38.93% growth following the announcement.
As of Tuesday afternoon, the stock was trading with gains of around 39% in response to the news.
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