Microsoft strikes $9.7 billion deal with IREN to access advanced Nvidia chips and ease AI compute crunch – Crypto News – Crypto News
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Microsoft strikes $9.7 billion deal with IREN to access advanced Nvidia chips and ease AI compute crunch Microsoft strikes $9.7 billion deal with IREN to access advanced Nvidia chips and ease AI compute crunch

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Microsoft strikes $9.7 billion deal with IREN to access advanced Nvidia chips and ease AI compute crunch – Crypto News

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Microsoft has secured a pivotal five-year, $9.7 billion agreement with data-centre operator IREN, which includes guaranteed access to advanced Nvidia chips. This strategic move is designed to alleviate the critical computing bottleneck that has hampered the tech giant’s capacity to fully capitalise on the surging artificial intelligence (AI) boom, Reuters reported.

The announcement sent shares in IREN rocketing by over 20% in Monday’s pre-market trading. AI server manufacturer Dell also saw its stock climb 5%, as it is set to supply IREN with Nvidia’s powerful GB300 chips and related equipment, a contract valued at approximately $5.8 billion, which Microsoft will ultimately utilise, the report added.

Capacity Crunch

The substantial deal underscores the AI industry’s rapidly accelerating demand for compute power necessary to run sophisticated applications like ChatGPT. This follows recent earnings reports from major technology firms, which highlighted that capacity shortages were significantly limiting their ability to fully benefit from the AI-driven market expansion.

By partnering with IREN, Microsoft gains the capacity to expand its computing capabilities without the need to construct new data centres or secure additional power sources—two of the most significant obstacles currently slowing its responsiveness to surging AI demand. Crucially, the deal also allows Microsoft to bypass heavy capital expenditure on chips that quickly depreciate as newer, more powerful processors become available.

IREN, which boasts a market valuation of $16.52 billion following a more than six-fold surge in its shares this year, operates multiple data centres across North America with a total capacity of 2,910 megawatts, all of which are powered entirely by renewable energy.

The Nvidia processors are scheduled for phased deployment through 2026 at IREN’s 750-megawatt campus in Childress, Texas. This site will incorporate new liquid-cooled data centres, expected to deliver about 200 megawatts of critical IT capacity.

In a regulatory filing, IREN confirmed that the cash from Microsoft’s upfront payment will help finance part of its $5.8 billion contract with Dell. However, the agreement with Microsoft includes a crucial clause: it can be terminated should IREN fail to meet the stipulated delivery timelines. The pressure to secure capacity remains high; Microsoft CFO Amy Hood stated last week that the company now anticipates its AI capacity crunch will persist until at least mid-2026, revising an earlier prediction of improvement by the end of this year.

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