Microsoft and IREN $9.7 Billion Artificial Intelligence Agreement

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

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

IREN stated that it will finance the upcoming investments through its existing cash reserves, customer prepayments, and additional funding sources. Daniel Roberts, co-founder and co-CEO of IREN, 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 ranging from data centers to GPU infrastructure has made the company a strategic partner in the field of artificial intelligence.

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

It is becoming a new trend for companies coming from cryptocurrency mining to shift to the field of artificial intelligence, leveraging their existing energy infrastructure and data centers. Although the unsuitability of ASIC devices for artificial intelligence operations poses a disadvantage, these firms gain a significant advantage in GPU hosting services thanks to their robust infrastructure.