Microsoft signs USD 9.7 billion deal with IREN to secure AI compute power

Microsoft has entered in a five year, USD 9.7 billion contract with IREN, an Australian data centre operator to secure access to artificial intelligence (AI) cloud capacity.

This agreement grants Microsoft guaranteed access to Nvidia GB300 accelerator systems, which are designed for advanced Ai workloads. IREN will house this hardware in its expanding data centre complex in Childress, Texas.

Strategy to mitigate compute shortfall

The partnership with IREN offers Microsoft an important avenue to bypass the bottlenecks in AI computing. For over a year, Microsoft has heavily invested in its cloud infrastructure, spending billions in capital expenditures to keep up with the explosive demand for AI tools and services hosted on its Azure platform.

By utilizing an external partner like IREN, Microsoft quickly secures powerful, next-generation Graphics Processing Units (GPUs) without undertaking the full, often slow, process of constructing new data centers and securing large, dedicated power sources. Furthermore, the contract structure may help Microsoft manage the risk of rapid hardware depreciation in the fast-moving chip market.

The hardware and financial details

The five-year contract mandates that IREN will purchase the necessary chips and related equipment through a separate USD 5.8 billion deal with Dell Technologies. IREN plans to deploy the new GB300 processors in phases throughout 2026 at its Childress, Texas, campus. This facility is developing into a large-scale, liquid-cooled AI data center, with 200 megawatts of critical IT capacity dedicated to the project.

The USD 9.7 billion contract includes a 20% prepayment from Microsoft. This cash influx gives IREN capital to help finance the substantial equipment purchase from Dell and accelerate the infrastructure buildout.

For IREN, a company that historically focused on bitcoin mining, the contract marks a major shift toward high-margin AI infrastructure services. IREN CEO Daniel Roberts stated that the deal validates the scalability of the company's vertically integrated AI Cloud platform. The agreement positions IREN as a significant vendor within the emerging "neocloud" sector.

Also, the financial news immediately impacted the stock market, with IREN's shares surging after the announcement. Dell Technologies' stock also rose, reflecting its role as the hardware supplier. This multi-billion dollar agreement signals the continued intense competition among hyperscale cloud providers—Microsoft, Amazon Web Services, and Google Cloud—to secure the computational foundation for their AI ambitions.