Digi Power X Surges on $1.1B AI Data Center Contract

Digi Power X Secures $1.1 Billion AI Data Center Agreement

Digi Power X Inc. (NASDAQ:DGXX) announced a Master Services Agreement with Cerebras Systems for an AI data center, causing its shares to increase by 25%. The initial 10-year contract is valued at approximately $1.1 billion.

Project Overview and Timeline

The agreement involves the colocation of a 40-megawatt AI data center campus in Columbiana, Alabama. Digi Power X will develop the facility in two phases. Phase 1 will consist of a 15 MW IT load, with an additional 25 MW in Phase 2.

The facility will be constructed to Tier III infrastructure standards, optimized for the high-density thermal needs of AI hardware. Construction on Phase 1 will commence immediately and is being self-funded by the company. The target Ready-for-Service date is December 15, 2026, with full deployment anticipated by the end of the first quarter of 2027.

Financial and Market Impact

This deal provides Digi Power X with significant long-term revenue visibility, with a total potential contract value of up to $2.5 billion inclusive of renewal terms. The immediate market reaction was a 25% surge in the company's stock price.

The Columbiana site was selected for its robust power infrastructure and strategic location. The company has already completed the on-site substation and secured a power delivery agreement with Alabama Power. Revenue generation is expected to begin in late 2026.

Summary

The partnership with Cerebras Systems positions Digi Power X as a key player in the growing AI infrastructure market. The project's progress and the company's ability to meet the 2026-2027 timeline will be critical factors for investors to monitor.

FAQ

Q: What is the total value of the deal for Digi Power X?
A: The initial 10-year term is valued at approximately $1.1 billion, with a potential total value of up to $2.5 billion including renewals.

Q: When will the new data center be operational?
A: Phase 1 is targeted to be ready by December 15, 2026, with full deployment expected by the end of the first quarter of 2027.

Source: Investing.com