Microsoft invests 9.7 billion dollars in IREN.

Microsoft Takes the Reins with IREN

Microsoft represents a significant transformation in the crypto mining sector with its deal worth approximately $9.7 billion with IREN. In an announcement made on Wednesday, the Australia-based IREN has become Microsoft's largest customer. Under this 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 registered an approximately 580% rise since the beginning of the year.

Additionally, IREN has established a partnership with Dell Technologies worth about $5.8 billion to purchase processors and related equipment. This agreement further solidifies the transformation of crypto miners into a central player in the artificial intelligence wave, evaluating the opportunity to utilize land, energy, and data centers for AI workloads through long-term contracts.

Numerous miners, such as Riot, TeraWulf, and Cipher Miner, have redirected their resources towards high-performance computing infrastructure and artificial intelligence. This shift has resulted in respective stock increases of 100%, 160%, and 360% for 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 are providing heated power shells for AI data centers, which is considered the biggest bottleneck for execution."

Chhugani added, "Every Bitcoin miner listed on the US exchanges 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, the four-year 'halving' event of Bitcoin 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 the stock an 'Outperform' 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."