Microsoft invests 9.7 billion dollars in IREN.

Microsoft Takes the Reins with IREN

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

IREN shares rose by 10% on the first day and have recorded an approximately 580% increase year-to-date.

Additionally, IREN established a partnership with Dell Technologies worth around $5.8 billion to purchase processors and related equipment. This agreement reinforces the transformation of cryptocurrency miners into a central player in the artificial intelligence wave, exploring opportunities to deploy 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 stock increases of 100%, 160%, and 360% respectively for these companies this 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 are considered the biggest bottleneck for execution."

Chhugani added, "Every Bitcoin miner listed on the US stock exchange has undergone a transformation toward optimizing the value of energy assets instead of maximizing Bitcoin earnings." Fluctuations in Bitcoin prices and a crowded mining space have squeezed profit margins, while the four-year 'halving' event for 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 an 'Outperform' 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."