IREN's $9.7bn Microsoft Deal Signals Shift to Scalable AI Infrastructure
The GPUs will be deployed in stages at IREN’s 750-megawatt Childress, Texas campus, which is being developed with liquid cooling systems and built to handle up to 200 megawatts of critical IT load. The site signals a strategic shift by IREN from ASIC-based systems to GPU-rich data centres aligned with the computational demands of next-generation AI.
The financial impact has been immediate. IREN reported a 355% year-on-year revenue rise to $240.3 million in Q1 FY26, alongside a swing to $384.6 million in net income. Backed by $1.8 billion in cash and recent capital raises—including $1 billion from zero-coupon convertible notes and $200 million allocated to GPU acquisition—the company is strongly capitalised to deliver on its expansion.
The Microsoft contract, which includes a 20% upfront prepayment, is part of a broader diversification of IREN’s AI cloud customer base. Multi-year agreements with Together AI, Fireworks AI and Fluidstack have pushed IREN’s AI Cloud annualised recurring revenue above $500 million by early 2026. This growth reflects the wider market shift towards AI-specialised infrastructure, where renewable-powered, flexible data centres are increasingly in demand.
Microsoft’s own acknowledgement of infrastructure shortages into mid-2026 underscores the urgency. The deal enables Microsoft to scale AI capacity without the long lead times and costs of building new data centres. IREN, meanwhile, will secure GPU hardware through a $5.8 billion agreement with Dell Technologies, ensuring access to cutting-edge AI accelerators.
In parallel, IREN is converting its British Columbia site from ASICs to GPUs by the end of 2026 and advancing its 2GW Sweetwater Hub. With phased substations coming online in 2026 and 2027, the company is extending its AI infrastructure footprint significantly.
IREN’s transformation from bitcoin miner to hyperscale AI infrastructure provider illustrates the broader "neocloud" trend—repurposing crypto-era infrastructure for AI. These retrofitted facilities, already powered by renewables and optimised for high energy use, are well-suited to meet the rising demands of AI computation. Investors have responded with confidence. Shares surged more than 20% following the Microsoft announcement and have rallied 500% over the past year. The response highlights strong market backing for IREN’s pivot and long-term growth potential.
With robust financials, major partnerships and future-ready infrastructure, IREN is well-positioned to lead in AI cloud services. Its rapid evolution reflects a growing global appetite for sustainable, scalable AI infrastructure—and reinforces the role of US-based operators in shaping the future of responsible AI innovation.
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