Microsoft invests 9.7 billion dollars in IREN.

Microsoft Takes the Reins with IREN

Microsoft represents a significant transformation in the cryptocurrency mining sector with its approximately $9.7 billion deal with IREN. In an announcement made on Wednesday, IREN, based in Australia, became Microsoft's largest customer. Under this five-year agreement, the neo-cloud operator, specialized in data centers for AI workloads, will provide Microsoft access to Nvidia chipsets.

IREN shares rose by 10% on the first day and have recorded an increase of approximately 580% since the beginning of the year.

Additionally, IREN has established a partnership with Dell Technologies worth approximately $5.8 billion to purchase processors and related equipment. This agreement solidifies the transformation of cryptocurrency miners into a central player in the AI wave, allowing them to take advantage of land, energy, and data centers for AI workloads through long-term contracts.

Many miners, such as Riot, TeraWulf, and Cipher Miner, have redirected their resources towards high-performance computing infrastructure and AI. This shift has led to respective stock increases of 100%, 160%, and 360% over the year for these companies.

Bernstein analyst Gautam Chhugani and his team stated, "Bitcoin miners are now an integral part of the AI value chain. They provide heated power shells for AI data centers, which is considered the biggest bottleneck for execution."

Chhugani added, "Every Bitcoin miner listed on the US stock exchange has undergone a transformation towards optimizing the value of energy assets rather than maximizing Bitcoin earnings." While fluctuations in Bitcoin prices and a crowded mining space have compressed profit margins, Bitcoin's four-year 'halving' event has further eroded revenues over time.

IREN announced earlier this year that it would cease expanding its Bitcoin mining operations and prioritize its AI cloud and data center business. Bernstein has issued a 'Buy' rating with a price target of $75 for the shares, saying, "We believe there is still room for multiple expansions as IREN continues to scale its AI business."