Shares of Bitcoin mining company MARA Holdings rose 17% on Thursday after the company announced a partnership with Starwood Capital Group to build a large data center at its existing U.S. site.
The agreement will transform selected MARA locations, many of which were originally developed for Bitcoin mining, into facilities serving enterprise cloud and artificial intelligence customers.
Starwood, which has more than $125 billion in assets under management, will lead design, construction and tenant acquisition through its data center unit, Starwood Digital Ventures. The partners expect to deliver approximately 1 gigawatt of computing capacity in the short term, with plans to expand to more than 2.5 gigawatts over time. The two companies will jointly fund and operate the projects.
The transaction marks a major transformation for MARA.
The company is best known as a Bitcoin miner, but it controls sites that have direct access to large power sources. That access becomes valuable as tech companies work to get power for new artificial intelligence data centers.
MARA’s move is in line with a trend among many Bitcoin miners to repurpose their infrastructure to meet the growing demand for artificial intelligence computing. The shift began after Bitcoin’s recent halving, which saw miner rewards cut in half. As electricity costs rise, Bitcoin prices fall, and mining competition intensifies, miners’ profit margins are squeezed, forcing most companies to diversify or turn entirely to hosting machines at artificial intelligence companies.
Recently, another Bitcoin miner, Bitfarms (BITF), said it is changing its name to Keel Infrastructure as part of its data center development away from Bitcoin mining and towards high-performance computing (HPC) and artificial intelligence workloads.
However, for MARA, it has not given up its identity as a Bitcoin mining company. In fact, CEO Fred Thiel said in a shareholder letter that “Bitcoin remains a core pillar of MARA’s strategy.”
Thiel added: “While the timing of Bitcoin’s price recovery is difficult to predict, our long-term belief in the asset class remains unchanged.”
MARA also reported fourth-quarter earnings, with revenue falling 6% to $202.3 million from $214.4 million in the fourth quarter of 2024 as the average price of Bitcoin mined fell 14% during the quarter.