Bernstein Backs IREN’s Bitcoin Mining Pivot, Sees $3.7 Billion AI Cloud Business

IREN is shifting from its roots in bitcoin mining toward AI cloud infrastructure, repurposing its access to large-scale power and data-center capacity. Its $9.7 billion agreement with Microsoft is a pivotal test of that strategy, as hyperscalers compete to secure the high-density computing resources needed for generative AI workloads and increasingly turn to specialist infrastructure providers for additional capacity.

The company has delivered the first of four planned AI cloud deployments to Microsoft, including a 50-megawatt facility certified by NVIDIA. IREN aims to expand its AI cloud capacity to 480 MW in 2026 and 1.2 GW in 2027. The rollout marks tangible progress in reducing its dependence on bitcoin mining and building a larger, contracted cloud-computing business.

IREN, best known as a bitcoin miner, has been expanding into AI cloud computing by deploying its data-center infrastructure and access to power for high-performance workloads. The shift is increasingly central to its investment case as technology companies race to secure computing capacity, giving IREN an opportunity to turn energy resources into longer-term contracts and more predictable revenue.

IREN raised its annual AI cloud revenue target to more than $4 billion after signing $2.8 billion of new contracts with AI developers including Microsoft and Nvidia. The announcement sent the company’s shares up about 16% in a single session. IREN also plans to sharply expand its AI cloud computing capacity in 2026 as it moves to meet strong customer demand.

IREN, originally focused on Bitcoin mining and renewable-energy data centers, has increasingly redeployed its existing power and data-center assets for AI cloud computing. Its large-scale purchase of NVIDIA Blackwell systems from Dell Technologies is intended to support a previously announced five-year, $3.4 billion managed AI cloud services contract, underscoring an accelerating shift in its revenue mix.

On May 27, 2026, IREN announced a $1.6 billion procurement agreement with Dell Technologies. The air-cooled Blackwell systems will be deployed at its existing data center in Childress, Texas, and are expected to become operational in early 2027. IREN estimates that the contract could raise annualized revenue from $3.7 billion to $4.4 billion once it goes live. Its shares rose 4% in premarket trading after the announcement.

IREN was previously focused primarily on bitcoin mining but has pivoted in recent years to building GPU cloud infrastructure for AI training and inference, using its existing power, land and data-center assets. Expanding AI computing capacity requires substantial upfront capital. The scale of this financing underscores capital-market support for the miner’s transformation and will affect how quickly it can expand its data centers and computing clusters.

IREN Limited initially planned a $2 billion note offering on May 11, 2026, increased it to $2.6 billion on May 12 and completed a $3 billion private placement of convertible senior notes due 2033 on May 14. The notes carry a 1% coupon and include a $400 million option to purchase additional notes. Net proceeds were approximately $2.96 billion, of which $201.3 million was used for capped-call transactions, with the remainder earmarked for corporate purposes and working capital.