Microsoft and IREN's $9.7 Billion Artificial Intelligence Agreement

IREN, which transitioned from Bitcoin mining to the artificial intelligence field, drew attention with its $9.7 billion GPU cloud service agreement signed with Microsoft. In a statement made on Monday, IREN indicated that a five-year artificial intelligence infrastructure agreement had been reached, demonstrating that this move has generated significant excitement among investors.

As part of this agreement, Microsoft will provide IREN access to Nvidia GB300 GPU hardware. While it was announced that the total value of the agreement is $9.7 billion, it was also noted that Microsoft made a 20% upfront payment. Additionally, IREN announced that it signed a separate agreement worth $5.8 billion with Dell Technologies to purchase GPUs and related equipment. It was revealed that these GPUs will be gradually deployed at the 750 MW Childress campus in Texas by 2026.

IREN stated that it will finance the investments through existing cash reserves, customer prepayments, and additional funding sources. Daniel Roberts, IREN's co-founder and co-CEO, expressed that the agreement showcases the power and scalability of the company’s “vertically integrated AI cloud platform.” Jonathan Tinter, head of business development at Microsoft, emphasized that IREN's expertise, spanning from data centers to GPU infrastructure, has made the company a strategic partner in the artificial intelligence field.

Following the agreement, IREN shares saw an almost 30% increase in pre-market trading, drawing attention. The share price is currently trading at $74.51, and the company's shares have gained 489% in value since the beginning of the year. According to Bernstein analysts, IREN's expansion into the artificial intelligence cloud could generate annual revenue of $500 million by early 2026. Analysts revised their target price for the shares to $75, a level that was tested immediately after the news.

It is becoming a new trend for companies coming from cryptocurrency mining to shift towards the artificial intelligence field, thanks to their existing energy infrastructures and data centers. Although the unsuitability of ASIC devices for artificial intelligence operations poses a disadvantage, these firms are gaining significant advantages in GPU hosting services due to their solid infrastructures.