Cipher Mining rockets 32% after $5.5B data center deal with Amazon

Bitcoin mining company Cipher Mining surged more than 32% after revealing a new 15-year deal with tech giant Amazon, adding to a wave of partnerships between major technology companies and crypto miners.

The 15-year lease agreement with Amazon Web Services, valued at $5.5 billion, requires Cipher to provide turnkey space and power for AI workloads in two phases, starting in July and August next year, the Bitcoin (BTC) miner announced on Monday.

Cipher Mining also posted a significantly narrowed net loss of $3 million and a rise in adjusted earnings of $41 million for the third quarter, compared to a net loss of $46 million and adjusted earnings of $30 million in the previous quarter.

This led to Cipher’s stock shooting up 32% from $18.65 to a peak of $24.80 during trading on Monday before settling back to $22.76 by the end of the trading day.

Source: Cipher Mining

Bitcoin miners have been increasingly diversifying income streams by shifting their energy capacity toward AI and HPC hosting services after the April 2024 halving cut mining rewards to 3.125 Bitcoin, which has hurt overall profitability.

Cipher and Google are in business as well

In September, Google acquired a 5.4% stake in Cipher Mining as part of a $3 billion, multi-year data center deal with AI data center company Fluidstack.

Cipher CEO Tyler Page said in a statement on Monday that the company “executed a pivotal transaction with Fluidstack and Google, which firmly established our credibility in the HPC space.”

“We are now following that transaction with another major step forward by signing our first direct lease with a Tier 1 hyperscaler,” he added.

Along with the Amazon deal, Cipher also announced it has a majority stake in a joint venture to develop a one-gigawatt AI hosting site in West Texas, known as Colchis. Under the deal, Cipher provides most of the financing and will take a 95% equity ownership.

Miners and tech giants making deals

Tech giants have become increasingly involved with Bitcoin miners this year. Bitcoin mining company IREN signed a multi-year GPU cloud services contract with Microsoft worth $9.7 billion on Monday as well.

Meanwhile, TeraWulf announced a $3.7 billion hosting agreement in August with Fluidstack, backed by Google parent company Alphabet.