Microsoft’s Billion-Dollar Bet on Former Bitcoin Miner Iris Energy

In a stunning strategic pivot, Iris Energy (IREN) has transformed from a cryptocurrency mining operation into a multi-billion dollar infrastructure partner for Microsoft. The announcement of a $9.7 billion agreement with the technology giant sent the company's shares soaring more than 20% in pre-market trading, marking one of the most dramatic corporate transformations in recent memory.

The five-year cloud services contract represents a validation of IREN's decision to completely reposition its business model. Just last year, the company operated primarily as a Bitcoin mining enterprise, but management announced in April 2025 they would halt cryptocurrency mining expansion entirely to focus on AI cloud services. This forward-thinking strategy has now positioned IREN as a key infrastructure provider in the artificial intelligence revolution.

At the core of this landmark agreement is IREN's advanced computing infrastructure, specifically the NVIDIA GB300 GPU clusters housed at their 750-megawatt Childress, Texas facility. The implementation will be phased through 2026, establishing the former crypto miner as a significant contender in the rapidly expanding artificial intelligence sector.

Financial Breakdown and Market Position

Key metrics underscore the scale of this transformation:

Should investors sell immediately? Or is it worth buying Iris Energy?

• Contract Value: $9.7 billion over five years
• Upfront Payment: 20% of total contract value
• Current Operational Capacity: 810 megawatts already online
• Expansion Projects: 2,100 megawatts of additional capacity under development
• Market Capitalization: $16.5 billion

The company has further solidified its infrastructure foundation through a separate $5.8 billion hardware procurement agreement with Dell Technologies, ensuring it has the necessary equipment to fulfill its ambitious service commitments.

Industry-Wide Transformation Underway

Market experts at Bernstein have responded positively to these developments, assigning IREN a price target of $75 per share with an "outperform" rating. The research note highlighted that the company has already secured contracts for 11,000 of its 23,000 GPUs, which are projected to generate approximately $225 million in annual revenue by the end of 2025.

IREN exemplifies a broader sector trend where former Bitcoin mining operations like Riot Platforms and TeraWulf are successfully transitioning into AI infrastructure providers. This strategic shift is being driven by multiple factors: an increasingly competitive cryptocurrency mining landscape, volatile digital asset prices, and exploding demand for artificial intelligence computing capacity.

Investors will be watching closely when the company releases its Q1 financial results on November 6, which may indicate whether the Microsoft partnership represents just the beginning of IREN's ascent in the AI infrastructure space.