Microsoft and IREN's $9.7 Billion Artificial Intelligence Deal

IREN, which has transitioned from Bitcoin mining to the artificial intelligence sector, has drawn attention with its $9.7 billion GPU cloud service agreement signed with Microsoft. In an announcement made on Monday, IREN stated that a five-year artificial intelligence infrastructure agreement has been made, indicating that this move has created significant excitement among investors.

As part of this agreement, Microsoft will provide IREN access to Nvidia GB300 GPU hardware. While it was reported that the total value of the agreement is $9.7 billion, it was also noted that Microsoft made a 20% advance payment. Additionally, IREN announced that it has signed a separate agreement with Dell Technologies for $5.8 billion to purchase 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 expressed that it will cover the investments through its existing cash reserves, customer advance payments, and additional financing sources. IREN’s co-founder and co-CEO Daniel Roberts stated that the agreement showcases the power and scalability of the company’s “vertically integrated AI cloud platform.” Microsoft’s head of business development, Jonathan Tinter, 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 surged nearly 30% in pre-market trading, attracting attention. The stock is currently trading at $74.51, and the company's shares have increased by 489% since the beginning of the year. According to Bernstein analysts, IREN’s artificial intelligence cloud expansion could generate an annual revenue of $500 million by early 2026. Analysts have revised their price target for the shares to $75, which was immediately tested after the news.

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