Microsoft just gave a former Bitcoin miner its biggest AI deal yet
Microsoft (MSFT) on Monday signed a $9.7-billion, multi-year GPU cloud deal with former bitcoin miner IREN Limited.
The agreement calls for IREN to provide the software giant with Nvidia GB300 GPUs over the next five years. The GPUs will be deployed in separate phases through 2026 at IREN’s 750 MW campus in Texas.
The deal includes Microsoft making a 20% prepayment to IREN.
“We’re proud to announce this milestone partnership with Microsoft, highlighting the strength and scalability of our vertically integrated AI Cloud platform,” Daniel Roberts, co-founder and Co-CEO of IREN, said in a statement.
“This agreement not only validates IREN’s position as a trusted provider of AI Cloud services, but also opens access to a new customer segment among global hyperscalers.”
The deal with Microsoft represents a big victory for IREN, validating its decision to pivot from bitcoin mining to AI infrastructure and cloud services.
As part of its transition into this new line of business, IREN has been ramping up its stock of Nvidia (NVDA) Blackwell GPUs and AMD MI350X GPUs.
The company in September doubled its AI cloud capacity to 23K GPUs after purchasing an additional 12.4K GPUs. It is now targeting $500 million in AI cloud annualized run-rate revenue (ARR) by the first quarter of 2026.
The company said that it had purchased 7.1K B300s, 4.2K B200s and 1.1K AMD MI350Xs for about $674 million.
IREN procured an additional 4.2K NVIDIA Blackwell B200 GPUs for approximately $193 million in August.
The company has noted that there is a “growing trend” of customers contracting capacity prior to delivery, which points to the need for doubling down on its supply.
And now it appears to be paying off with the Microsoft deal.
“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,” Roberts added.
Wall Street cheers bitcoin miners’ AI pivot
Jonathan Tinter, president of business development and ventures at Microsoft, said in a statement that the partnership with IREN “unlocks new growth opportunities for both companies and the customers we serve.”
“Together with IREN, Microsoft is delivering cutting-edge AI infrastructure for our customers,” he said.
“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.”
In a client note on Monday morning, Bernstein analyst Gautam Chhugani welcomed the pivot that publicly traded bitcoin miners have been making toward so-called “neocloud” services.
"Bitcoin miners are now an integral part of the AI value chain, providing warm powered shells for AI data centers - considered the biggest bottleneck to execution," Chhugani wrote.
“As we write this, every U.S. listed bitcoin miner has pivoted towards optimizing value of their power assets over maximizing bitcoin upside."
IREN’s stock gained 11.5% on news of the deal, while Microsoft’s shares were mostly flat.