Microsoft invests $9.7 billion in IREN.

Microsoft Takes the Reins with IREN

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

IREN stocks rose by 10% on the first day and have seen 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 artificial intelligence wave and evaluates the opportunity to use land, energy, and data centers for AI workloads with long-term contracts.

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

Bernstein analyst Gautam Chhugani and his team stated, "Bitcoin miners have now become 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 U.S. stock exchange has undergone a transformation toward optimizing the value of energy assets instead of maximizing Bitcoin earnings." Volatility in Bitcoin prices and a crowded mining space have been compressing profit margins, while 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 artificial intelligence cloud and data center business. Bernstein has given a 'Buy' rating with a price target of $75 for the shares, stating, "We believe there is still room for multiple expansions as IREN continues to scale its AI business."