Microsoft has signed a roughly $US9.7 billion ($14.8 billion) deal to buy artificial intelligence computing capacity from Iren, becoming the Australian company’s largest customer.
The five-year agreement gives Microsoft access to Nvidia systems in Texas built for AI workloads and includes a 20 per cent prepayment, Iren said in a statement on Monday. Sydney-based Iren has agreed to buy the necessary advanced chips known as graphics processing units and related equipment for $US5.8 billion from Dell Technologies.
Iren co-CEO Dan Roberts, who has founded and runs the company with his brother Will Roberts.Credit: Oscar Colman
Microsoft has inked several multibillion-dollar deals with data centre operators such as Iren and CoreWeave over the past year in an effort to lock in as much as computing capacity as it can to compete in the race to build and power AI systems. Just last week, the US tech giant said it’s still struggling to secure enough capacity to fulfil all the demand for its cloud services.
On Monday, Microsoft separately announced plans to spend more than $US7.9 billion on data centres, cloud computing and employees in the United Arab Emirates over the next four years, capitalising on a US government clearance to ship artificial intelligence chips to the Gulf nation. Microsoft president Brad Smith laid out the commitment in Abu Dhabi, pledging to nearly triple the amount of advanced Nvidia chips the company will operate in the nation.
Iren is among the data centre operators known as neoclouds, specialising in supplying the advanced computing that technologies such as AI need. CoreWeave, Nebius Group, Crusoe and Nscale are all vying to provide computing power to large hyperscalers like Microsoft and AI companies such as OpenAI. Many of these companies, including Iren, began as bitcoin mining operations and have diversified into AI.
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Once the Microsoft-Iren deal is fully implemented, it’s expected to generate approximately $US1.94 billion in annualised revenue, Iren Chief Executive Officer Daniel Roberts said via email. It will use about 10 per cent of Iren’s total capacity, leaving room for the infrastructure provider to sign more contracts and generate additional revenue.
“We’ve always viewed the major hyperscalers as natural partners,” Roberts said. “We’ve been in discussions with several of them, and those conversations have accelerated as both their compute requirements and our AI Cloud capabilities have grown.”
Iren shares surged more than 28 per cent in pre-market US trading after the announcement, while Dell’s stock rose about 4 per cent. Microsoft was little changed. Iren’t ASX-listed shares jumped 8.1 per cent on Monday.
