Key Takeaways
- WindHQ retains the controlling 51% stake in the venture, establishing Canaan as a minority partner in the operations.
- Zhang emphasised that acquiring direct access to low-cost Texas power infra allows the company to align its proprietary mining equipment with critical energy resources.
In a major development, Bitcoin mining hardware manufacturer Canaan Inc. has purchased Cipher Mining’s 49% stake in a Texas-based joint venture operating three crypto mining facilities, marking a strategic pivot toward direct energy infrastructure development in North America.
The transaction, announced on Monday and valued at approximately $39.75 million, transfers Cipher’s equity position in ABC Projects, comprising Alborz LLC, Bear LLC, and Chief Mountain LLC, to Canaan. As per reports, WindHQ retains the controlling 51% stake in the venture, establishing Canaan as a minority partner in the operations.
Canaan compensated Cipher entirely through equity, issuing 806,439,900 Class A ordinary shares equivalent to 53,762,660 American Depositary Shares at USD0.7394 per ADS. The shares carry a six-month restriction preventing immediate sale by Cipher.
The three West Texas facilities collectively provide 120 megawatts of power capacity supporting roughly 4.4 exahashes per second of computational power for bitcoin mining. Canaan highlighted the sites’ electricity costs, averaging below USD 0.03 per kilowatt-hour, as a primary attraction of the assets.
Commenting on the development, Nangeng Zhang, Canaan’s chairman and chief executive, characterised the purchase as representing “a disciplined expansion of our North American digital asset footprint and a decisive step in executing Canaan’s broader energy strategy.” Zhang emphasised that acquiring direct access to low-cost Texas power infrastructure allows the company to align its proprietary mining equipment with critical energy resources.
The transaction includes an additional component beyond the equity transfer. Canaan separately acquired 6,840 Avalon A15Pro mining machines from Cipher that had been operating at Cipher’s Black Pearl facility. Canaan originally manufactured and sold these units to Cipher in last July. Cipher is now converting the Black Pearl site from crypto mining operations into a high-performance computing data center focused on artificial intelligence applications.
Zhang welcomed Cipher’s new status as a significant Canaan shareholder, stating that the arrangement “reflects our shared commitment to robust corporate governance” whilst supporting “Cipher’s impressive evolution into a key player in the AI and HPC sectors.”
Cipher CEO Tyler Page indicated his company’s willingness to accept share-based compensation stems from confidence in Canaan’s long-term growth trajectory within American markets.
The acquisition signals Canaan’s departure from what the company described as an “opportunistic, asset-light power approach” toward systematic upstream energy development. The manufacturer plans to pursue direct power applications in the United States whilst integrating traditional bitcoin mining with AI-focused high-performance computing colocation strategies.
Canaan outlined ambitious infrastructure goals, targeting construction of a project pipeline capable of supporting gigawatt-scale electricity consumption by late 2026. This represents a substantial escalation from the company’s current 120-megawatt exposure through the ABC Projects acquisition.
The expansion also follows strong fourth-quarter financial performance reported earlier this month. Canaan posted $196 million in revenue for the period, representing 121% growth compared to the previous year and marking the company’s strongest quarterly sales in three years. Increased mining machine sales drove the revenue improvement.
The West Texas crypto mining sector has attracted significant capital investment due to the region’s combination of competitive electricity rates, grid infrastructure, and regulatory environment. Multiple mining operations have established facilities across the state, with some operators now diversifying into artificial intelligence computing as bitcoin mining economics fluctuate.
The transaction leaves WindHQ maintaining majority control of the ABC Projects venture whilst providing Canaan with direct operational exposure to established mining facilities rather than requiring greenfield development.
