Bitcoin mining infrastructure company Canaan has taken over Cipher Digital's stake in several cryptocurrency mining projects in Texas.

Canaan has purchased a 49 percent equity interest in a joint mining venture in West Texas from Cipher, in a deal worth $39.75m.

The mining venture includes three West Texas mining sites: Alborz LLC, Bear LLC, and Chief Mountain LLC (collectively, the "ABC Projects"). Canaan now owns 49 percent of the venture, while WindHQ LLC maintains its 51 percent stake.

The three sites have a combined power output of 120MW, which supports ~4.4 EHps of operational mining hashrate. The sites boast an average power rate of sub-three cents/kWh according to the announcement.

The deal was funded through the issuance of 806,439,900 Canaan Inc. Class A ordinary shares, equal to 53,762,660 American Depositary Shares (ADS), priced at $0.7394 per ADS. The total transaction cost amounts to $39.75M, and the shares will be locked up for six months.

The ABC Projects include an off-grid wind farm at the Alborz site, while Bear and Chief will draw power from the Texas grid.

As part of the deal, Canaan has also acquired 6,840 Canaan Avalon A15Pro-AVG-221T mining rigs from Cipher, which were originally purchased from Canaan and powered up at Cipher's Black Pearl site, which is being transformed into an AI-HPC data center.

"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 CEO of Canaan.

“By increasing our exposure to high-quality, low-cost operational power assets in Texas, we are aligning our proprietary technology with critical infrastructure to drive long-term efficiency and scale,” Zhang added.

Cipher CEO Tyler Page said the company was happy to take a meaningful equity position in Canaan because he sees “significant opportunity ahead” for Canaan.

"We are proud of the role we played in developing the ABC Projects and bringing them to their current operational stage. Given that history, it was important for us to transition the assets to an industry leader capable of advancing the long-term vision we established for these sites,” Page added.

Cipher Digital, recently rebranded from Cipher Mining, is pivoting away from cryptomining towards developing large-scale data center sites for AI and hyperscale customers. The company has secured Amazon and Fluidstack as customers (the latter backed by Google) at its planned sites in Texas.