Canaan Inc. has acquired a 49% stake in three West Texas bitcoin mining projects from Cipher Mining in a $39.75 million all-stock deal that will make Cipher one of the Singapore-based company’s largest shareholders.

The cipher mining venture agreement centers on Cipher’s stake in the so-called ABC Projects — Alborz LLC, Bear LLC and Chief Mountain LLC — which together form a critical slice of industrial-scale mining infrastructure in Texas. The remaining 51% interest in the cipher mining venture continues to be held by WindHQ.

Under the terms disclosed Monday, Canaan funded the purchase by issuing 806.4 million Class A ordinary shares, equivalent to 53.8 million American depositary shares (ADS). Those shares will be subject to a six-month lock-up period.

Ownership Realignment in a Strategic Cipher Mining Venture

The cipher mining venture deal significantly alters the ownership dynamics between the two publicly traded bitcoin mining firms. Cipher Mining, a U.S.-based operator known for developing and managing large-scale data centers, exits its minority position in the West Texas cipher mining venture but gains meaningful equity exposure to Canaan.

Canaan, listed on Nasdaq under the ticker CAN, is widely recognized as a manufacturer of bitcoin mining machines under its Avalon brand and as an operator of mining infrastructure. By absorbing Cipher’s 49% interest in the cipher mining venture, Canaan tightens its grip over assets that are already energized and hashing.

The cipher mining venture assets collectively provide 120 megawatts (MW) of energized power capacity. That infrastructure currently supports approximately 4.4 exahashes per second (EH/s) of hashrate, with fleet efficiency averaging around 25.7 joules per terahash (J/TH). In an industry where margins hinge on power costs and machine efficiency, those metrics are critical.

Market reaction was swift. Canaan shares slid 6% in Monday trading, while Cipher Mining shares climbed 4%, reflecting divergent investor interpretations of the cipher mining venture reshuffle. Cipher is slated to report its fourth-quarter earnings before the market opens on Feb. 24, a release that could further contextualize the strategic rationale behind the transaction.

Hardware Expansion Tied to the Cipher Mining Venture

Beyond the equity stake, the cipher mining venture agreement includes a hardware component that strengthens Canaan’s operational footprint. The company also acquired 6,840 Avalon A15Pro mining rigs that had previously been deployed at Cipher’s Black Pearl facility.

That site is undergoing a transformation. Cipher has been converting the Black Pearl facility from a bitcoin mining operation into an artificial intelligence and high-performance computing (HPC) data center. The pivot reflects a broader industry trend of repurposing power-dense infrastructure to tap into surging demand for AI workloads.

By folding the Avalon A15Pro units into its own operations, Canaan can redeploy or optimize those machines within the broader cipher mining venture portfolio. The move ensures that productive hardware remains aligned with bitcoin mining objectives even as Cipher reorients part of its infrastructure strategy toward AI.

In effect, the cipher mining venture transaction not only rebalances equity interests but also redistributes physical mining assets in a way that sharpens each company’s strategic focus.

Strategic Implications for Both Companies

For Canaan, the cipher mining venture acquisition strengthens vertical integration. The company already designs and manufactures mining equipment; increasing direct ownership of mining infrastructure allows it to capture more value across the supply chain. Controlling a larger slice of the cipher mining venture means greater exposure to bitcoin production and potentially improved operational synergies between hardware manufacturing and site management.

For Cipher Mining, listed on Nasdaq under CIFR, the decision to exchange its 49% stake in the cipher mining venture for Canaan stock provides diversified upside. Rather than remaining a minority partner in specific West Texas projects, Cipher now holds a significant equity position in a global mining hardware producer and infrastructure operator.

The six-month lock-up on the newly issued shares signals a commitment to longer-term alignment. It also tempers immediate selling pressure, giving the market time to digest the impact of the cipher mining venture restructuring.

Industry observers have noted that scale and efficiency remain decisive factors in bitcoin mining profitability. As Marathon Digital CEO Fred Thiel has previously emphasized in public commentary, access to low-cost power and operational efficiency are “the two most important levers” in sustaining margins in competitive hash markets. The cipher mining venture assets, with 120MW of energized capacity and competitive fleet efficiency, fit squarely within that framework.

Similarly, Riot Platforms CEO Jason Les has underscored in earnings calls the importance of disciplined capital allocation and strategic site control in Texas, one of the most important mining hubs in North America. The expansion of Canaan’s cipher mining venture presence reinforces the continued centrality of the Lone Star State in the global bitcoin mining map.

A Calculated Bet on Scale and Alignment

Ultimately, the cipher mining venture transaction represents a calculated recalibration rather than a wholesale shift in business models. Canaan consolidates operational control and deepens its exposure to U.S.-based mining output. Cipher monetizes a minority stake while securing a meaningful shareholding in a vertically integrated peer.

With 120MW of live capacity, 4.4 EH/s of hashrate and thousands of Avalon A15Pro rigs changing hands, the cipher mining venture deal underscores how publicly traded miners are continuously optimizing their asset mix in response to market conditions.

As the industry awaits Cipher’s fourth-quarter earnings report on Feb. 24, investors will be watching closely for further clarity on how the cipher mining venture restructuring fits into broader capital allocation plans. What is already clear, however, is that this $39.75 million stock transaction has reshaped ownership in one of West Texas’ notable mining clusters — and tightened the strategic ties between two key players in the global bitcoin mining arena.