Digi Power X bets big on next-gen data centers

Core Viewpoint - Digi Power X Inc is transitioning from Bitcoin mining to focus on AI data centers, aiming to leverage its existing power infrastructure for higher-value opportunities in the AI sector [1][2]. Company Strategy - The company is rebranding itself as a power infrastructure provider, specifically targeting Tier 3 NeoCloud AI data centers [1][2]. - Digi Power X has four operational sites and approximately 100 megawatts of Bitcoin mining capacity, with plans to develop its first Tier 3 AI data center in Alabama [2][3]. - The economic valuation of AI infrastructure is significantly higher than Bitcoin mining, with AI infrastructure valued at $10 million to $12 million per megawatt compared to $500,000 per megawatt for Bitcoin mining [2]. Infrastructure and Deployment - The Alabama site is expected to be operational by late 2025, initially using 200 Nvidia B200 chips, with plans to upgrade to B300s in early 2026 [3]. - The company can build a Tier 3 data center in six to nine months, significantly faster than the typical three to five years required by new entrants [4]. - Digi Power X's partnership with Super Micro Computer enhances its capabilities, allowing for rapid deployment of AI data centers optimized for high-performance computing [6][7]. Financial Performance - The company's model aims to deliver predictable cash flow and strong margins, with a payback period of less than three years [8]. - Digi Power X's power generation assets have been profitable, supplying electricity to the grid at margins described as "exceptional" during recent heatwaves [11]. - The company is rebating gas at $2.55 per gigajoule, resulting in an effective cost of around $31–32 per megawatt-hour, while the grid pays up to $150 per megawatt-hour [11]. Market Positioning - Digi Power X positions itself as a complementary infrastructure provider to major tech companies, focusing on dedicated AI infrastructure solutions [12]. - The company is refining its execution strategy to convert megawatts into higher-value infrastructure, aiming for a 20 to 25 times multiple [12].