Microsoft Secures $9.7B AI Cloud Agreement with Former Bitcoin Mining Firm
Microsoft's Major AI Cloud Acquisition
Microsoft has announced a significant $9.7 billion agreement to procure AI cloud services from IREN, a company transitioning from its roots in Bitcoin mining to a focus on artificial intelligence infrastructure.
Key Details of the Agreement
- Under this five-year contract, Microsoft will utilize Nvidia GB300-based AI systems located in Texas.
- IREN, which previously specialized in large-scale Bitcoin mining, plans to purchase $5.8 billion in GPUs from Dell Technologies, projecting nearly $1.9 billion in annual revenue from this venture.
This development represents one of the largest endorsements of the neocloud sector, comprising data center companies that have shifted from blockchain to AI applications.
Market Impact and Strategic Implications
The announcement has propelled IREN’s stock to rise over 30% in premarket trading, continuing a 500% increase this year driven by the demand for AI hardware. Similar to peers CoreWeave and Crusoe, IREN is repurposing its energy-intensive infrastructure for AI tasks, showcasing how former mining hardware is evolving into valuable computing resources bridging blockchain and AI.
Meanwhile, Microsoft is leveraging such agreements to address the growing demand for its Azure AI services amidst a global shortage of GPU availability.