Key Highlights
- Digi Power X (DGXX) stock rallied approximately 39% following the announcement of a Master Services Agreement with Cerebras Systems
- The partnership involves a 40 MW AI data center facility located in Columbiana, Alabama
- The initial ten-year agreement is worth $1.1 billion, with potential expansion to $2.5 billion through renewal options
- Construction will proceed in two phases, with Phase 1 scheduled for completion by December 15, 2026
- Revenue generation is projected to commence in late 2026, with maximum capacity expected by Q1 2027
Shares of Digi Power X (DGXX) experienced a significant rally of approximately 39% on Tuesday following the company’s disclosure of a substantial colocation partnership with Cerebras Systems, a prominent AI chip manufacturer.
The partnership encompasses a custom-designed 40 megawatt AI data center complex in Columbiana, Alabama. The base ten-year agreement carries an estimated value of $1.1 billion.
Including potential renewal periods, the total contract value may climb to $2.5 billion. This arrangement provides Digi Power X with predictable, long-term revenue streams starting from the facility’s operational launch.
Development of the complex will unfold across two distinct phases. The initial phase encompasses 15 MW of IT capacity, while the second phase contributes an additional 25 MW, totaling 40 MW upon completion.
The infrastructure will meet Tier III data center standards. Engineering specifications have been tailored specifically for the high-density thermal requirements characteristic of advanced AI accelerator technology — precisely the type of computing workloads Cerebras deploys.
Phase 1 construction begins without delay. Notably, Digi Power X is financing Phase 1 development independently, a significant commitment considering the project’s magnitude.
The company has already finalized the on-site electrical substation for Phase 1. Grid connectivity has been secured, and an electricity delivery contract with Alabama Power is fully executed.
The Columbiana location was selected based on its robust power infrastructure, favorable regulatory framework, and strategic positioning near major fiber optic networks throughout the southeastern region. Digi Power X holds full ownership of the property.
Revenue Projections
Phase 1 aims for a Ready-for-Service milestone of December 15, 2026. Complete buildout spanning both phases is anticipated by the conclusion of Q1 2027.
Income from this partnership is forecast to initiate in late 2026. Maximum revenue generation is planned to coincide with the full 40 MW deployment becoming operational.
What Cerebras Gains From This Partnership
For Cerebras, this agreement secures dedicated data center infrastructure from day one of operations. This level of capacity assurance is critical for an organization expanding cutting-edge AI computing capabilities.
Cerebras Systems has established itself through its large-format AI processors and computing platforms. The Columbiana facility was characterized as being engineered “from the ground up” to address extreme power density and uptime requirements.
The arrangement creates mutual benefits. Digi Power X obtains a committed revenue pipeline. Cerebras secures exclusive, purpose-engineered capacity without undertaking real estate development responsibilities.
DGXX is also listed on Cboe Canada under the ticker DGX, which appreciated approximately 38.93% on the announcement.
The stock was trading higher by roughly 39% as of Tuesday afternoon in response to the news.
