A former Bitcoin mining company has become the latest beneficiary of the artificial intelligence infrastructure gold rush, securing what may be one of the largest cloud services contracts in tech history. IREN Limited announced Monday that Microsoft has agreed to a five-year, $9.7 billion deal for access to cutting-edge NVIDIA GPU capacity - a transaction that sent IREN's stock soaring and validated the emerging "neocloud" sector's pivot from crypto mining to AI computing.
The deal represents a remarkable transformation for IREN, which until recently was known primarily for its renewable-powered Bitcoin mining operations. Now, the Sydney-based company finds itself at the center of tech's most critical infrastructure battle: securing enough computing power to train and run increasingly sophisticated artificial intelligence models.
Under the agreement, Microsoft will gain access to NVIDIA's latest GB300-based AI systems hosted at IREN's facilities in Texas. The contract includes a 20% prepayment from Microsoft - nearly $2 billion upfront - providing IREN with substantial capital to execute its ambitious infrastructure buildout.
To fulfill the contract, IREN has entered into a separate $5.8 billion agreement with Dell Technologies to purchase NVIDIA GB300 GPUs and ancillary equipment. These chips represent NVIDIA's latest "Blackwell Ultra" architecture, featuring 72 GPUs per rack with 130 terabytes per second of bandwidth and designed specifically for the memory-intensive workloads required by advanced AI models.
The GPUs will be deployed in phases through 2026 at IREN's 750-megawatt campus in Childress, Texas, alongside new liquid-cooled data centers that will collectively support 200 megawatts of critical IT load across four phases designated as "Horizon 1–4."
IREN expects to generate approximately $1.9 billion in annualized revenue from the Microsoft contract, making it one of the most lucrative deals yet struck in the neocloud sector - a term referring to the emerging category of data center firms that have evolved from cryptocurrency mining into AI infrastructure providers.
Market Reaction: Investors Validate the AI Pivot
The market's response was immediate and enthusiastic. IREN shares surged more than 30% in premarket trading following the announcement, building on a stunning 500% rally already achieved this year as the company's AI transformation gained momentum.
The stock jumped from Friday's close of $60.75 to trade above $73 in early Monday trading, reflecting investor confidence that IREN has successfully positioned itself in one of technology's fastest-growing segments.
This explosive growth reflects broader enthusiasm for companies that can solve a critical bottleneck facing the AI industry: access to sufficient GPU computing capacity. As AI models have grown exponentially in size and capability, demand for the specialized chips that power them has dramatically outstripped supply, creating opportunities for unconventional providers to enter the market.
The Neocloud Revolution: From Crypto Mining to AI Computing
IREN's journey from Bitcoin miner to AI infrastructure provider exemplifies a broader transformation sweeping through the cryptocurrency mining industry. Companies like CoreWeave and Crusoe have pioneered this transition, leveraging the same skills that made them successful in crypto - power efficiency, high-density cooling, and large-scale computing management - to meet the exploding demand for AI workloads.
The parallels between Bitcoin mining and AI computing are more profound than they might initially appear. Both require massive amounts of electricity, efficient cooling systems, and expertise in managing thousands of specialized processors running at maximum capacity. Bitcoin miners were forced to master these competencies to survive the industry's boom-and-bust cycles, and those same skills have become invaluable in the AI era.
What differentiates neoclouds from traditional cloud providers like Amazon Web Services, Microsoft Azure, or Google Cloud is their laser focus on raw GPU compute power. While the hyperscalers built their infrastructure for flexible, general-purpose workloads, neoclouds specialize in dense clusters of NVIDIA GPUs connected by high-speed networks optimized specifically for training and running large language models.
This specialization allows neoclouds to offer competitive pricing and faster deployment times compared to traditional providers, who face constraints retrofitting their existing data centers for AI's power-hungry, heat-generating workloads.
Why Microsoft Is Betting on Neoclouds
Microsoft's willingness to commit nearly $10 billion to IREN reflects the tech giant's aggressive strategy to secure GPU capacity amid fierce competition. The company has been racing to meet surging demand for its Azure AI services, particularly as its exclusive partnership with OpenAI drives enormous computational requirements.
Microsoft recently deployed more than 4,600 NVIDIA GB300 GPUs in its own data centers for OpenAI's workloads, but even that massive investment isn't sufficient to satisfy demand. By contracting with neocloud providers like IREN, Microsoft can rapidly expand its effective GPU capacity without bearing the full capital expense and operational complexity of building new data centers from scratch.
The IREN deal is part of a broader pattern. Microsoft has also committed $17.4 billion to Nebius Group and inked major contracts with other specialized AI infrastructure providers. This distributed approach allows Microsoft to scale its AI services more quickly than would be possible relying solely on internal resources.
For IREN, the Microsoft contract provides not just revenue but also validation. Landing one of tech's biggest players as an anchor customer significantly de-risks IREN's expensive infrastructure buildout and positions the company to attract additional customers who need GPU capacity at scale.
The Technical Challenge: Building at Unprecedented Scale
Executing on a contract of this magnitude presents formidable challenges. IREN must procure and deploy thousands of NVIDIA's GB300 GPUs through 2026, a timeline that depends on NVIDIA's ability to manufacture and deliver these cutting-edge chips amid global semiconductor constraints.
The company must also complete construction of its liquid-cooled data centers capable of handling the immense power and thermal loads these GPUs generate. Each GB300 rack can consume up to 136 kilowatts, requiring sophisticated cooling systems and power distribution infrastructure far beyond what traditional data centers need.
IREN plans to fund these capital expenditures through a combination of existing cash reserves, the 20% Microsoft prepayment, operating cash flow, and additional financing initiatives. The company's ability to access capital markets was bolstered by a recent $1 billion convertible notes offering, demonstrating investor confidence in its AI transformation.
Broader Industry Implications
IREN's success validates a trend that could reshape both the cryptocurrency and cloud computing industries. Other Bitcoin mining companies are watching closely and pursuing similar pivots. Companies like Hut 8, Riot, and CleanSpark are all exploring opportunities to repurpose their infrastructure for AI workloads.
CoreWeave's reported $9 billion acquisition of Core Scientific - another Bitcoin miner-turned-AI provider - in mid-2025 further demonstrates that major cloud infrastructure players see strategic value in acquiring or partnering with former mining operations. The deal gave CoreWeave access to Core Scientific's 1.3 gigawatts of power capacity and helped fulfill a $16 billion order backlog from OpenAI.
The transformation also reflects harsh realities facing Bitcoin miners. After Bitcoin's April 2024 halving event reduced block rewards, mining profitability has declined substantially, with costs estimated at $70,000 per Bitcoin. For many miners, pivoting to AI infrastructure offers a path to more stable, predictable revenue streams compared to the volatility of cryptocurrency markets.
Final thoughts
For IREN, the Microsoft deal represents both an enormous opportunity and a substantial execution risk. The company must successfully deploy billions of dollars worth of cutting-edge hardware on an aggressive timeline while managing the operational complexity of running one of the world's largest GPU clusters.
Daniel Roberts, IREN's CEO, framed the deal as validation of the company's transformation: "This 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."
From Microsoft's perspective, the relationship provides crucial flexibility. Jonathan Tinter, President of Business Development and Ventures at Microsoft, emphasized the strategic nature of the partnership: "Together with IREN, Microsoft is delivering cutting-edge AI infrastructure for our customers. 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."
As the AI arms race intensifies and models continue growing in size and sophistication, access to massive GPU capacity has become a strategic imperative for every major technology company. IREN's transformation from cryptocurrency miner to essential AI infrastructure provider demonstrates how quickly the competitive landscape is evolving - and how the skills honed in one computing revolution can prove invaluable in powering the next.
The success or failure of this massive undertaking will be closely watched across both the crypto and AI industries. If IREN can execute effectively, it will cement the neocloud sector's role as a critical pillar of AI infrastructure. If it stumbles, it will serve as a cautionary tale about the risks of rapid pivots and aggressive expansion in capital-intensive industries.
For now, the market is betting on success, and Microsoft has placed a $9.7 billion wager that the future of AI runs through data centers originally built to mine digital gold.