Microsoft and IREN's $9.7 Billion Artificial Intelligence Deal

IREN, which transitioned from Bitcoin mining to artificial intelligence, drew attention with its $9.7 billion GPU cloud service agreement signed with Microsoft. In a statement made on Monday, IREN announced a five-year artificial intelligence infrastructure agreement, indicating 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 the total value of the agreement has been reported as $9.7 billion, it has also been 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 purchase GPUs and related equipment. It was stated that these GPUs would be gradually deployed at the 750 MW Childress campus in Texas by 2026.

IREN expressed that it will fund the investments through its existing cash reserves, customer prepayments, and additional financing sources. Daniel Roberts, the co-founder and co-CEO of IREN, stated that the agreement showcases the “power and scalability of the company’s vertically integrated AI cloud platform.” Jonathan Tinter, Microsoft’s head of business development, emphasized that IREN's expertise spanning 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 almost 30% increase in pre-market trading, attracting attention. The current share price stands at $74.51, and the company's shares have gained 489% year-to-date. According to Bernstein analysts, IREN's expansion into the AI cloud could generate $500 million in annual revenue by early 2026. Analysts have revised their price target for the stock to $75; this level was tested immediately after the news.

It is becoming a new trend for companies that have come from cryptocurrency mining to turn towards artificial intelligence, thanks to their existing energy infrastructure and data centers. Although the unsuitability of ASIC devices for AI processes presents a disadvantage, these firms have a significant advantage in GPU hosting services due to their robust infrastructure.