MARA Holdings experienced a significant surge in its share price, climbing 17% following the announcement of a strategic partnership with Starwood Capital Group. This collaboration aims to transform various existing U.S. locations into expansive data centers focused on serving enterprise cloud and artificial intelligence (AI) customers, marking a notable shift in MARA’s business model.
The agreement will see the conversion of select sites originally developed for Bitcoin mining into advanced facilities designed to meet the growing demands of the tech industry. Starwood Capital, which oversees an impressive portfolio of over $125 billion in assets, will take charge of the design, construction, and tenant sourcing through its dedicated data center division, Starwood Digital Ventures. The partnership anticipates delivering approximately 1 gigawatt of computing capacity initially, with aspirations to scale up to more than 2.5 gigawatts as the projects progress.
This pivot is particularly significant for MARA, traditionally rooted in Bitcoin mining, as it capitalizes on its existing infrastructure and direct access to substantial power supplies—an increasingly valuable asset given the current challenges technology firms face in securing sufficient power for new AI data centers. The move comes amid a broader trend of Bitcoin miners, including companies like Bitfarms, shifting their focus to accommodate the surging demand for AI computing capabilities.
The reorganization of its business model follows a tough period for Bitcoin miners, particularly after the recent halving event, which reduced miners’ rewards significantly. Combined with rising energy costs, declining Bitcoin prices, and heightened competition in the mining space, many firms have been compelled to diversify their revenue streams. MARA’s strategy reflects a response to these market pressures while still maintaining its foundational identity as a Bitcoin mining firm.
CEO Fred Thiel reiterated this commitment in a recent shareholder letter, stating, “Bitcoin remains a core pillar of MARA’s strategy.” While acknowledging the uncertainty surrounding the recovery of Bitcoin prices, he emphasized the company’s long-term belief in the value of the asset class.
In conjunction with this shift, MARA has also released its fourth-quarter earnings, reporting a 6% revenue decline to $202.3 million, down from $214.4 million during the same period last year. This downturn was primarily attributed to a 14% decrease in the average price of Bitcoin mined throughout the quarter, further underscoring the challenges currently facing the cryptocurrency mining industry.
