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Digi Power X Signs AI Colocation Agreement with Leading AI Compute Company for 40 MW Data Center in Columbiana, Alabama
Digi Power X Secures $1.1 Billion Cerebras Deal, Validating AI Pivot at Scale
Executive Summary
- On May 5, 2026, Digi Power X Inc. announced a Master Services Agreement (MSA) with Cerebras Systems for a 40 MW AI data center campus in Columbiana, Alabama.
- The initial contract term is valued at approximately $1.1 billion over 10 years, with potential total value up to $2.5 billion including renewal and expansion options ($1.4 billion option).
- Development is split into two phases: Phase 1 (15 MW) targeted for service by December 15, 2026; Full deployment (40 MW) expected by end of Q1 2027.
- Infrastructure standards are Tier III, optimized for high-density AI accelerator hardware.
- Digi Power X owns the underlying real property and has completed on-site substation construction with finalized grid interconnection and power delivery agreement with Alabama Power.
- Phase 1 construction is being self-funded by Digi Power X; revenue commencement expected late 2026.
Material Impact
- Scale of Contract: The $1.1 billion initial contract value represents a significant multiple of the company's estimated market capitalization (~$270 million) and vastly exceeds previous contracted revenue announcements (e.g., April 20, 2026 SubQ AI agreement valued at $19.6 million).
- Strategic Validation: This agreement validates the company's pivot from cryptocurrency mining to AI infrastructure, moving beyond pilot projects ($19.6M) to enterprise-scale deployment ($1.1B).
- Execution Risk: While the contract value is material, revenue recognition is back-loaded (Phase 1 ready Dec 2026, Full Q1 2027). The company must successfully complete construction and commissioning within the next 7 months to meet Phase 1 targets.
- Capital Requirements: Although Phase 1 is self-funded, full deployment of 40 MW will require significant capital expenditure beyond current liquidity ($78.5M cash per FY2025 results). The company has an ATM program available ($75 million capacity) which may be utilized for further expansion or working capital.
- Customer Concentration: Reliance on a single anchor tenant (Cerebras) for the majority of projected revenue introduces concentration risk if the customer's demand shifts or technology requirements change.
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Company Overview
- Overview: Digi Power X Inc. is an energy-efficient digital infrastructure firm focused on next-generation data centers and AI computing power solutions. The company has pivoted from cryptocurrency mining to AI colocation and GPU-as-a-Service (NeoCloudz).
- Flagship Project: Columbiana, Alabama Data Center Campus. This site hosts the 40 MW agreement with Cerebras Systems. It features owned real property, completed substation construction, and finalized grid interconnection.
- Development Status: Phase 1 (15 MW) is under construction for late 2026 completion. The company also operates sites in Upstate New York (hydroelectric capacity) and North Carolina (zoning approved).
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Jun 03, 2026 · 07:30