The landmark partnership underscores the rise of “neocloud” providers repurposing mining infrastructure for AI workloads, as Microsoft seeks to ease GPU shortages.
Microsoft Expands AI Cloud Power Through $9.7B Deal
Microsoft announced a $9.7 billion agreement with IREN, a former Bitcoin mining company turned AI cloud infrastructure provider, to secure large-scale compute capacity for Azure AI services.
The five-year deal grants Microsoft access to Nvidia GB300-based AI systems hosted at IREN’s Texas data centers, marking one of the largest commercial partnerships yet in the emerging “neocloud” sector — firms evolving from cryptocurrency mining into artificial intelligence infrastructure.
The announcement triggered a 30% surge in IREN’s stock during premarket trading, extending its nearly 500% year-to-date rally, fueled by the global boom in GPU demand.
IREN’s $5.8B GPU Expansion
As part of the agreement, IREN will purchase $5.8 billion worth of GPUs from Dell Technologies, expanding its AI data center capacity to meet Microsoft’s compute needs. The company expects the partnership to generate approximately $1.9 billion in annualized revenue once fully deployed.
The project positions IREN as a key player in the AI infrastructure market, leveraging its existing energy-efficient, high-density data centers originally built for Bitcoin mining.
“IREN’s ability to convert mining facilities into liquid-cooled AI clusters shows how next-gen cloud infrastructure can emerge from the crypto industry,” said analysts at The Block Research.
From Bitcoin Mining to the Neocloud Era
IREN, once focused on large-scale Bitcoin mining operations, has pivoted to AI cloud services — joining peers like CoreWeave and Crusoe Energy that are repurposing mining infrastructure for high-performance computing (HPC) and AI workloads.
This shift reflects a broader trend in the digital asset sector, where energy-rich miners are monetizing their infrastructure by catering to the AI and cloud computing markets.
For Microsoft, these partnerships help alleviate ongoing global GPU shortages, ensuring sufficient compute power to support Azure OpenAI services and enterprise-level AI deployments.
Strategic Implications
The IREN-Microsoft deal highlights how traditional tech giants are increasingly turning to decentralized-origin firms to scale AI capacity amid surging demand.
Analysts note that the agreement could reshape cloud competition, with “neocloud” firms offering faster deployment and lower energy costs than conventional hyperscalers.
“This partnership validates the strategic convergence of Bitcoin mining and AI,” said industry expert Vincent Liu. “What began as blockchain infrastructure is now becoming the backbone of the AI economy.”
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.