The shifting sands of the tech world just delivered a massive win for former crypto miners. Microsoft is dropping a colossal 1$\$9.7$ billion.2 That money is going to IREN, a company that once focused on Bitcoin.3
This five-year agreement is huge. It makes Microsoft IREN’s largest customer, instantly. IREN—now a “neocloud operator”—will supply Microsoft with highly-coveted Nvidia chips.4 The chips will live at IREN’s huge facility in Childress, Texas.5
The market immediately cheered. IREN stock jumped as much as 10% on the news yesterday. Shares are up about 580% for the year, a staggering comeback story.
It’s all part of the big pivot. Squeezed by Bitcoin’s price swings and the latest “halving” event, miners are turning to AI.6 They are leveraging their existing land, power, and data centers. This infrastructure is perfect for the intense demands of AI workloads.
Bernstein analyst Gautam Chhugani called the miners an “integral part of the AI value chain.” He noted they provide the crucial “warm powered shells” that the AI industry desperately needs. That physical infrastructure is seen as the biggest bottleneck right now.
Other miners are following suit. Riot, TeraWulf, and Cipher Miner have all funneled resources into High-Performance Computing (HPC) for AI. Their stocks have also soared: 100%, 160%, and 360% respectively this year.
IREN, formerly known as Iris Energy, abandoned its Bitcoin expansion plans earlier this year.7 Their priority became AI cloud services. Now that move is paying off in billions. Bernstein maintains a Buy rating on the stock.8 They see a path to a $\$75$ price target, arguing the AI business still leaves room for more gains.
This shift shows a fundamental change. These companies are now focused on maximizing the value of their energy assets. They are no longer just betting on Bitcoin’s unpredictable upside.