Microsoft Just Dropped $9.7 Billion on an AI Data Center Bet -- Here's Who's Cashing In

Microsoft Corp. MSFT is doubling down on its AI ambitions with a $9.7 billion deal to buy cloud capacity from Australia's IREN Ltd., signaling how fierce the global race for computing power has become. The five-year agreement, which includes a 20% prepayment, gives Microsoft access to Nvidia-powered GB300 systems built in Texas for AI workloads. IREN's CEO Daniel Roberts said the partnership could generate roughly $1.94 billion in annualized revenue once fully deployed. To deliver the infrastructure, IREN will acquire $5.8 billion worth of GPUs and related hardware from Dell Technologies Inc. IREN's shares jumped more than 28% in pre-market U.S. trading after the announcement, while Dell rose about 4%.

The deal cements IREN's position among the fast-rising neocloud players a new breed of AI-focused infrastructure providers that includes CoreWeave, Nebius Group, and Crusoe. Many of these firms started in Bitcoin mining before pivoting into high-performance AI computing. IREN's Nasdaq-listed stock has already surged more than 500% this year, lifted by investor confidence in the company's transformation and the wider AI infrastructure boom that has turned Nvidia into a $5 trillion giant. Roberts said the company has been in active talks with several hyperscalers, and that discussions have accelerated as AI compute demand continues to outpace traditional cloud expansion.

For Microsoft, the move could be part of a broader strategy to ease its cloud bottleneck as Azure struggles to meet surging AI workloads from clients like OpenAI. IREN plans to install the GB300 systems in stages through next year at its 750-megawatt Childress, Texas facility, while also fielding strong interest for additional deployments at its 2-gigawatt Sweetwater Hub near Abilene. The partnership could mark a shift in how major tech companies secure AI infrastructure relying more on nimble, specialized operators to keep pace with the industry's next phase of exponential demand.