IREN surges on $9.7 billion deal to provide AI cloud capacity to Microsoft

IREN is surging this morning after inking an agreement to provide Microsoft with access to Nvidia Blackwell GPUs at a data center campus in Texas over a five-year period.

The total contract value is approximately $9.7 billion, per IREN, and includes a 20% prepayment. Dell also gets a piece of the action here, as Iren will purchase these GPUs as well as other equipment from the server maker for about $5.8 billion.

The bitcoin miner turned data center company said the GPUs will be deployed in phases through 2026.

“It marks another major step forward for IREN as we continue to expand large-scale GPU deployments across our 3GW secured power portfolio in North America, reinforcing our position as a leading AI Cloud Service Provider,” IREN cofounder and co-CEO Daniel Roberts said. He told Bloomberg that the deal accounts for about 10% of IREN’s total capacity.

That “secured power portfolio” reference in Roberts’ remarks is critical, and a key selling point for IREN here.

In a recent appearance on Brad Gerstner’s “Bg2 Pod,” Microsoft CEO Satya Nadella discussed how the key bottleneck for AI deployment doesn’t concern chips, but rather “the ability to get the builds done fast enough close to power. So if you can’t do that, you may actually have a bunch of chips sitting in inventory that I can’t plug in, and in fact, that is my problem today. It’s not a supply issue of chips; it’s actually the fact that I don’t have warm shelves to plug into.”

Jonathan Tinter, president of business development and ventures at Microsoft, echoed those comments in today’s press release, saying: “IREN’s expertise in building and operating a fully integrated AI cloud — from data centers to GPU stack — combined with their secured power capacity makes them a strategic partner.”