Microsoft strikes five year AI infrastructure deal worth $9.7b with IREN

• Company is reinforcing its position at the forefront in the race to meet surging demand for generative AI applications and advanced cloud services.
• Microsoft will rapidly expand its AI infrastructure without the delays and capital expense of constructing new sites or securing additional grid power.

Microsoft has entered into a landmark $9.7 billion agreement with data-centre operator IREN, securing access to Nvidia’s next-generation chips in a bid to overcome the computing shortfall preventing the tech giant from fully capitalising on the artificial intelligence surge.

News of the five-year partnership sent IREN shares soaring as much as 24.7 per cent to a record high on Monday, before closing up nearly 10 per cent. Dell Technologies also saw its stock rise about 1 per cent as it will supply IREN with Nvidia’s cutting-edge GB300 AI processors and related infrastructure, roughly $5.8 billion of which Microsoft is slated to use.

The deal highlights the intensifying scramble for AI computing power—a message echoed in recent earnings reports from top technology players, which noted that capacity constraints were tempering their ability to exploit the current AI boom.

By partnering with IREN, which operates data centres across North America with a combined capacity of 2,910 megawatts, Microsoft will rapidly expand its AI infrastructure without the delays and capital expense of constructing new sites or securing additional grid power.

The move also allows Microsoft to avoid locking up funds in chips that risk obsolescence as newer, more advanced models hit the market.

Competitive AI space

Much of the hardware will be deployed at IREN’s 750-megawatt Childress, Texas campus, where Nvidia processors and new liquid-cooled data centers are scheduled for phased installation through 2026—ultimately providing around 200 megawatts of critical IT capacity.

IREN, now valued at $16.52 billion after its stock price rose more than six fold this year, said funding from Microsoft’ would help finance its $5.8 billion contract with Dell. But the agreement includes a provision that allows Microsoft to walk away if IREN cannot meet strict delivery timelines.

This accelerated investment in so-called “neocloud” providers comes on the heels of Microsoft’s recent $17.4 billion infrastructure deal with Nebius Group, reflecting a broader trend of top tech firms seeking innovative partners—including CoreWeave —to keep pace in the competitive AI space.

Separately, AI infrastructure startup Lambda also announced a multibillion-dollar agreement with Microsoft to roll out Nvidia-powered AI systems, further underscoring the sector’s growing focus on high-performance computing.