Microsoft inks USD9.7b AI cloud contract with IREN
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The news: Microsoft signed an approximately USD9.7 billion ($14.81 billion) deal to buy AI cloud capacity from IREN, making it the Australian company’s largest customer.
The numbers: A press release shared by IREN on Monday said that the five-year agreement will give Microsoft access to NVIDIA GB300 GPU systems in Texas, with a total contract value of approximately USD9.7 billion, including a 20% prepayment.
IREN also said it has entered into an agreement with Dell Technologies to purchase the GPUs and ancillary equipment for approximately USD5.8 billion.
The GPUs are expected to be deployed in phases through 2026 at IREN’s Texas campus, in parallel with the delivery of new liquid-cooled data centres that will collectively support 200MW of critical IT load, the statement said.
The context: IREN CEO Daniel Roberts told Bloomberg that the deal is expected to generate approximately USD1.94 billion in annualised revenue and will use about 10% of IREN’s total capacity. This means the infrastructure provider will be able to sign more contracts and generate additional revenue.
IREN said it will fund the capital expenditures associated with the contract through a combination of existing cash, customer prepayments, operating cashflows and additional financing initiatives.
During October, the so-called neocloud (data centre operators specialising in AI) announced that it had contracted out 11,000 Nvidia GPUs to AI players and would seek to raise up to USD1 billion for further growth.
The Sydney-based, Nasdaq-listed company has been on a surging rally thanks to its expansion from a pure Bitcoin miner to a builder of data centres designed for the AI age. Its stock has risen 660% in the past year, giving it a market capitalisation of USD16.78 billion.
What they said: Roberts 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.”
“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.”
