Microsoft has finalized a significant agreement worth approximately $9.7 billion (around $14.8 billion) with Australian data center operator Iren, marking a pivotal moment as Iren becomes the tech giant’s largest customer. This five-year deal grants Microsoft access to advanced artificial intelligence computing capabilities, specifically through Nvidia systems located in Texas, as confirmed in a statement released by Iren on Monday.
Under the terms of the agreement, Microsoft will provide a 20 percent prepayment to Iren. In turn, Iren has committed to purchasing vital components, including graphics processing units and associated equipment, totaling $5.8 billion from Dell Technologies. Iren is co-led by brothers Dan and Will Roberts, who have steered the company towards becoming a key player in the AI landscape.
This latest arrangement follows a series of multibillion-dollar contracts Microsoft has secured with various data center operators over the past year, including CoreWeave. These deals aim to bolster Microsoft’s computing capacity amid escalating demand for cloud services and AI infrastructure. Recently, Microsoft acknowledged ongoing challenges in meeting the high demand for its cloud offerings, highlighting the urgency of securing additional computing resources.
In a related development, Microsoft also announced plans to invest over $7.9 billion in data centers, cloud computing, and staffing in the United Arab Emirates over the next four years. This initiative comes following a US government approval to export AI chips to the Gulf nation. Microsoft President Brad Smith detailed this commitment in Abu Dhabi, emphasizing plans to nearly triple the number of advanced Nvidia chips operated within the UAE.
Iren is categorized among the emerging data center firms known as “neoclouds,” which specialize in providing the advanced computational power essential for AI technologies. Competing alongside Iren are companies like Nebius Group, Crusoe, and Nscale, all vying to supply computing resources to major players like Microsoft and AI innovators such as OpenAI. Many of these organizations, including Iren, initially emerged from the bitcoin mining sector before diversifying into AI services.
Once the agreement between Microsoft and Iren is fully operational, it is projected to generate approximately $1.94 billion in annual revenue for Iren, according to CEO Daniel Roberts. The deal will utilize around 10 percent of Iren’s overall capacity, leaving ample room for the company to pursue additional contracts and revenue streams. Roberts remarked, “We’ve always viewed the major hyperscalers as natural partners. We’ve been in discussions with several of them, and those conversations have accelerated as both their compute requirements and our AI Cloud capabilities have grown.”
The announcement of the Microsoft-Iren partnership led to a notable surge in Iren’s stock, which jumped more than 28 percent in pre-market trading in the US. Meanwhile, Iren’s shares on the Australian Securities Exchange rose by 8.1 percent on Monday. This surge comes as Iren’s NASDAQ-traded shares have increased by over 500 percent this year, propelled by increasing investor confidence in the AI sector.
In Texas, the new GB300 systems are set to be installed at Iren’s facility in Childress over the next year, with plans to support 750 megawatts of computing capacity. Iren also operates a facility at its Sweetwater Hub near Abilene, boasting an additional 2GW of capacity, where there is a growing interest in large-scale AI infrastructure deployments, according to Roberts.
This strategic partnership underscores the increasing demand for AI computing capabilities and the competitive landscape among data center operators as they strive to meet the needs of leading technology firms.
