Canaan's Power Play: $40M Share Deal with Cipher Signals Deeper Push into US Energy and AI

SINGAPORE – February 24, 2026 – In a significant strategic maneuver highlighting the evolving landscape of the digital asset industry, crypto mining hardware giant Canaan Inc. announced yesterday it has acquired Cipher Mining's stake in a portfolio of West Texas bitcoin mining operations. The non-cash transaction, valued at approximately $39.75 million, was funded entirely through the issuance of new Canaan shares, transforming Cipher from a joint venture partner into one of Canaan's largest single shareholders.

The deal gives Canaan a 49% equity interest in three operational mining projects—Alborz LLC, Bear LLC, and Chief Mountain LLC, collectively known as the 'ABC Projects'—which boast a combined 120 megawatts (MW) of power capacity. This acquisition not only expands Canaan's physical footprint in North America but also marks a decisive step in its ambitious strategy to transition from a pure-play hardware manufacturer to a vertically integrated energy and computing infrastructure powerhouse.

Securing a Foothold in the Heart of Texas Power

The ABC Projects are a significant prize in the competitive world of bitcoin mining. Located in West Texas, they provide access to some of the most competitively priced electricity in the United States, with the company reporting average rates of sub-3 cents per kilowatt-hour (kWh). These facilities, which support a total operating hashrate of approximately 4.4 exahashes per second (EH/s), are deeply integrated into the Texas power grid, managed by the Electrical Reliability Council of Texas (ERCOT).

By taking over Cipher's stake, Canaan partners with WindHQ LLC, which retains its 51% majority ownership. This partnership provides Canaan with an established, localized operational framework in a region known for its abundant renewable energy and a regulatory environment that has, to date, been favorable to large-scale crypto miners. The projects are proficient in demand response programs, allowing them to sell power back to the grid during periods of high demand, a crucial capability that enhances profitability and promotes grid stability.

"This acquisition represents a disciplined expansion of our North American digital asset footprint and a decisive step in executing Canaan's broader energy strategy," said Nangeng Zhang, chairman and chief executive officer of Canaan, in a statement. He emphasized the goal of aligning proprietary technology with critical infrastructure to achieve long-term scale.

As part of the deal, Canaan also purchased 6,840 of its own Avalon A15Pro mining rigs from Cipher. These machines were previously operating at Cipher's Black Pearl site, an asset now being repurposed for a different, though related, high-tech purpose.

A Tale of Two Strategies: Crypto Mining and the AI Gold Rush

This transaction tells the story of two companies pursuing divergent yet interconnected strategies. While Canaan is pushing deeper into owning and operating mining infrastructure, Cipher is pivoting aggressively toward the booming artificial intelligence (AI) and high-performance computing (HPC) market.

Cipher's divestment from the ABC Projects frees up capital and management focus to accelerate the conversion of its Black Pearl facility into a 300 MW AI-HPC data center. This move is indicative of a broader industry trend where the infrastructure and energy expertise honed in the crypto mining sector are being redeployed to meet the insatiable demand for AI computing power. Cipher has reportedly sought up to $2 billion in financing for its Texas AI data center build-out and has been linked to a long-term lease with Amazon Web Services (AWS), signaling the scale of its ambition.

Tyler Page, CEO of Cipher, framed the transaction as a strategic handover. "We believe Canaan's vertical integration, technology leadership, and expanding energy platform make them the right steward for the next phase of growth," he stated, justifying Cipher's decision to take a significant equity position in Canaan. "Having worked alongside the Canaan team for years, we have strong conviction in their ability to execute, scale the platform, and drive sustained growth."

A Deal Built on Shares and a Shared Future

Rather than a cash transaction, the deal was structured through the issuance of over 806 million Canaan Class A ordinary shares to Cipher. This equates to nearly 53.8 million American Depositary Shares (ADSs) and gives Cipher an approximate 13.5% stake in Canaan, making it a powerful new voice among the company's shareholders. This equity-based consideration, subject to a six-month lock-up period, aligns the long-term interests of both firms.

However, the move was met with some trepidation by the market. The significant issuance of new shares introduces considerable dilution for existing stockholders, and Canaan's Nasdaq-listed stock saw a notable decline following the announcement. The market's reaction underscores the challenge Canaan faces in balancing its aggressive, capital-intensive growth strategy with shareholder concerns.

Canaan's own long-term vision explicitly involves this convergence of crypto and AI. The company has laid out an energy strategy that moves beyond opportunistic mining to a systematic development model, with the goal of securing a project pipeline of potentially gigawatt-scale load by the end of 2026. This strategy depends on integrating bitcoin mining with AI-HPC colocation to maximize the return on its infrastructure investments. With this acquisition, Canaan now has direct control over a key piece of the power infrastructure needed to turn that ambitious, dual-purpose vision into a reality.