Microsoft invests $9.7 billion in IREN.

Microsoft Takes the Reins with IREN

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

IREN shares saw a 10% increase on the first day and have risen approximately 580% since the beginning of the year.

In addition, IREN established a partnership with Dell Technologies for 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 and capitalizes on the opportunity to utilize 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 toward high-performance computing infrastructure and artificial intelligence. This shift has resulted in respective increases of 100%, 160%, and 360% in the stock prices of these companies over the year.

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 market has undergone a transformation toward optimizing the value of energy assets instead of maximizing Bitcoin earnings.” While fluctuations in Bitcoin prices and a crowded mining space have tightened profit margins, the four-year 'halving' event of Bitcoin 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, stating, “We believe there is still room for multiple expansions as IREN continues to scale its AI business.”