IREN Limited (NASDAQ: IREN) ("IREN") announced a significant multi-year GPU cloud services contract with Microsoft on Monday. The agreement, valued at approximately $9.7 billion over a five-year term, involves IREN providing Microsoft access to NVIDIA GB300 GPUs and includes a 20% prepayment. GLOBE NEWSWIRE also noted IREN entered a separate $5.8 billion deal with Dell Technologies to acquire the necessary hardware.
Deployment of the GPUs is expected in phases through 2026. This rollout will occur at IREN's 750MW Childress, Texas campus, alongside new liquid-cooled data centers supporting 200MW of IT load. IREN anticipates funding these capital expenditures through existing cash, customer prepayments, operating cashflows, and other financing initiatives.
Monday's premarket trading session saw IREN shares climb 25% to $75.91 following the Australian technology firm's announcement of the $9.7 billion agreement with Microsoft Corporation for artificial intelligence cloud capacity services.
Microsoft stock advanced 0.4% during the same premarket period, while futures contracts tracking the S&P 500 index similarly gained 0.4% amid positive investor sentiment surrounding the technology sector partnership.
Daniel Roberts, co-founder & co-CEO of IREN, commented on the deal, as reported by GLOBE NEWSWIRE: "We're proud to announce this milestone partnership with Microsoft, highlighting the strength and scalability of our vertically integrated AI Cloud platform."
"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," Roberts continued, according to GLOBE NEWSWIRE. "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."
Jonathan Tinter, Microsoft's President of Business Development and Ventures, also provided commentary, GLOBE NEWSWIRE reported. "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," Tinter stated, according to GLOBE NEWSWIRE. "This collaboration unlocks new growth opportunities for both companies and the customers we serve," he concluded, as per GLOBE NEWSWIRE.
Meanwhile, Microsoft Corp. said on Monday that it has committed to a substantial $7.9 billion investment in the United Arab Emirates over the next four years, a move set to significantly advance the nation's status as a global technology hub, according to reporting by Bloomberg.
Microsoft stated it intends to expend in excess of $7.9 billion on data centers, cloud-computing, and personnel within the United Arab Emirates during the upcoming four years, Bloomberg reported. This initiative supports the Gulf state's objective of transforming into an international technology center.
The commitment was announced by Microsoft president Brad Smith on Monday in Abu Dhabi, according to Bloomberg. This pledge encompasses intentions to nearly treble the quantity of Nvidia Corp. advanced chips that Microsoft utilizes in the country, importing essential equipment that has faced restrictions from the US government.
"This is not money we're raising here. It's money we're investing and spending here," Smith conveyed to Bloomberg Television during the Adipec oil conference in Abu Dhabi. "We are seeing demand here explode," the Bloomberg Television interview noted.
Access to leading semiconductors in the Gulf state remains a complex issue. Bloomberg reported in October the US approved chip exports to American firms in the UAE following a deal that sparked security concerns, though not yet to Emirati firms like G42. Some US officials have criticized placing critical equipment in the Middle East, fearing the tech could move to China. Microsoft, however, said it received US licenses in September to ship AI chips to the UAE. "They're not just acts of faith," Smith stated, per Bloomberg. "We had to satisfy very strict conditions about the cybersecurity, the physical security, the other security protection of these chips to ensure that they stay under our control."
The company previously deployed 21,500 Nvidia A100-equivalent chips in the UAE and plans to ship 60,400 more, including the GB300, arriving "in months, not years," according to Smith, as cited by Bloomberg. In a separate move reported by Reuters, Microsoft struck a $9.7 billion deal with data-center operator IREN for Nvidia's advanced chips. That agreement, aimed at easing the AI boom's computing crunch, sent IREN shares up over 20%. Dell will provide IREN with $5.8 billion in equipment, including GB300 chips, for Microsoft's use.
The five-year IREN deal highlights the AI industry's need for computing power, Reuters noted, as capacity shortages limit major tech firms. The partnership allows Microsoft to expand capacity without building new data centers or securing power, and it avoids heavy spending on chips that will quickly lose value. IREN, valued at $16.52 billion, operates renewable-energy-powered data centers in North America. IREN said the new processors will be deployed at its Texas campus by 2026, alongside new liquid-cooled data centers. A filing indicated Microsoft's prepayment helps finance IREN's $5.8 billion Dell deal.
Microsoft CFO Amy Hood stated last week that the company's AI capacity crunch is now expected to extend until at least mid-2026, revising an earlier prediction, according to Reuters. Reporting was provided by Deborah Sophia and Aditya Soni in Bengaluru, and the piece was edited by Arun Koyyur for Reuters.
