MARA Holdings (MARA.US) is partnering with Starwood Capital Group, a private investment firm led by Barry Sternlicht, to convert some of the bitcoin miner's existing sites into infrastructure capable of supporting artificial intelligence (AI) applications and other cloud services. Following the announcement, MARA's stock rose nearly 15% in after-hours trading on Thursday.
Under the partnership, Starwood Digital Ventures, the investment firm's data center development platform, will be responsible for the design, tenant recruitment, construction, and facility operations. MARA will contribute a selection of its sites. The cryptocurrency miner stated on Thursday that the two parties expect to deliver approximately 1 gigawatt of capacity immediately, with the potential to expand to 2.5 gigawatts. Financial terms of the agreement were not disclosed.
According to a presentation by MARA, the companies will hold joint ownership of all related projects, prioritizing sites that offer cost-effective energy sources and scalable interconnection capabilities. Barry Sternlicht commented in an interview on Thursday, "We evaluated numerous miners to see which were operational. The key factors were how quickly we could get these projects running and their geographic locations. We are very excited about this joint venture with MARA. Our brand is well-known and trusted in both debt and equity markets, which will help realize MARA's ambitions."
MARA CEO Fred Thiel stated that the miner has the right to retain up to 50% ownership in the joint venture, with both parties sharing development costs and profits. The announcement of the Starwood partnership coincided with MARA's report of a fourth-quarter loss of $1.7 billion, which included a $1.5 billion unrealized loss from writing down the value of its bitcoin holdings. The company is the second-largest corporate holder of the cryptocurrency, behind only Michael Saylor's MicroStrategy (MSTR.US). Additionally, MARA's Q4 revenue fell 6% year-over-year to $202 million.
Brian Dobson, Managing Director at Clear Street, noted, "MARA's deal with Starwood reinforces the idea that bitcoin miners can transition into high-performance computing (HPC) data centers. Their ability to secure power and their track record of monetizing megawatts give investors confidence." Bitcoin miners are increasingly seen as a significant group among major AI data center providers, as some possess access to cheap, readily available energy and sites that can be repurposed into higher-grade data centers for AI applications, reducing lead times compared to building from scratch.
Although MARA announced plans last year to develop infrastructure for AI inference services, stock market investors have shown a preference for bitcoin miners fully committed to an AI transformation. Shares of IREN (IREN.US), TeraWulf (WULF.US), and Cipher Digital (CIFR.US) have surged over the past year. These companies now have market capitalizations exceeding that of MARA, despite MARA generating more computational power for bitcoin mining than nearly all of its U.S.-listed peers.
Other major miners are facing growing pressure from shareholders to accelerate their transition into AI data center infrastructure providers. Activist investor Starwood has built a significant stake in Riot Platforms (RIOT.US) and is pushing the miner to increase its efforts in developing AI projects. Riot operates one of the world's largest mining facilities in Texas and has access to substantial energy resources. The downturn in digital asset prices has also hastened the industry's shift, with more miners liquidating bitcoin holdings and using portions of the proceeds to cover expenses or fund AI expansion.
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