Digi Power X Inc. (NASDAQ:DGXX) said its shares climbed 25% following the announcement of a Master Services Agreement with Cerebras Systems to colocate a 40 megawatt AI data center campus in Columbiana, Alabama.
The contract's initial term runs for 10 years and carries an estimated value of approximately $1.1 billion. When accounting for potential renewal terms, the total contractual value could expand to as much as $2.5 billion. The company said the agreement secures long-term revenue visibility for Digi Power X while guaranteeing Cerebras access to data center capacity from the first day of service.
The campus will be developed in two distinct phases. Phase 1 will provide 15 MW of IT load, with Phase 2 adding an incremental 25 MW to reach a combined 40 MW. The facility is being designed to Tier III infrastructure standards and will be optimized to meet the high-density thermal requirements associated with AI accelerator hardware.
Digi Power X will begin construction immediately on Phase 1, which it is self-funding, and has set a Ready-for-Service target date of December 15, 2026. The company expects full deployment of the campus by the end of the first quarter of 2027.
The company selected the Columbiana site based on its access to power infrastructure, a favorable regulatory environment, and proximity to major fiber corridors that serve the southeastern United States. Digi Power X owns the underlying real property and has completed construction of the dedicated on-site substation that will serve Phase 1. Grid interconnection has been finalized and a power delivery agreement is in place with Alabama Power.
Revenue from the initial phase is expected to begin in late 2026, with a full revenue ramp tied to the completion of the campus deployment, targeted in the first quarter of 2027.
Clear summary
Digi Power X will build a two-phase, 40 MW AI data center campus in Columbiana, Alabama, under a Master Services Agreement with Cerebras Systems. The 10-year initial term is valued at about $1.1 billion, with potential contract value up to $2.5 billion including renewals. Phase 1 is 15 MW, self-funded, with a Ready-for-Service target of December 15, 2026, and full deployment targeted by the end of Q1 2027.
Key points
- Strategic deal structure - Initial 10-year MSA valued at roughly $1.1 billion and up to $2.5 billion including renewals, providing extended revenue visibility.
- Phased build and timeline - Phase 1 (15 MW) starts immediately, self-funded, with a December 15, 2026 Ready-for-Service target; Phase 2 brings an additional 25 MW to reach 40 MW by end of Q1 2027.
- Site advantages and infrastructure - Campus chosen for power access, regulatory environment, and fiber proximity; on-site substation is complete with grid interconnection and a power delivery agreement in place with Alabama Power.
Risks and uncertainties
- Construction and schedule risk - Target dates for Ready-for-Service and full deployment are stated goals; any delays could shift expected revenue commencement in late 2026 and the revenue ramp planned for Q1 2027.
- Phase funding and execution - Phase 1 is self-funded, while funding for Phase 2 has not been described in the announcement, presenting an uncertainty for complete delivery of the 40 MW campus.
- Contract duration and renewal dependency - The headline $1.1 billion value covers the initial 10-year term; achieving the up-to-$2.5 billion total assumes renewals that are not guaranteed.