Microsoft inks $9.7B IREN deal for Nvidia AI chips
Microsoft signs a five-year, $9.7B deal with IREN for guaranteed access to Nvidia AI chips via Dell, easing compute bottlenecks; IREN shares surge over 20%.
At a glance
- Deal size & term: $9.7B over five years
- Partners: Microsoft, IREN (data centers), Dell (hardware supplier)
- Chips: Nvidia GB300, supplied by Dell under a ~$5.8B order
- Market reaction: IREN +20% pre-market; Dell +5%
- Deployment: Phased through 2026 at IREN’s 750MW Childress, Texas campus
- Capacity: IREN operates 2,910MW across North America, all renewable-powered
- Safeguards: Microsoft can terminate if delivery timelines aren’t met
Overview
Microsoft has signed a five-year, $9.7 billion agreement with data-center operator IREN that guarantees access to advanced Nvidia processors, a move aimed at easing the company’s acute shortage of AI computing capacity. The news sent IREN shares up more than 20% in pre-market trading on Monday, while Dell gained about 5% as a key hardware supplier in the rollout.
How the deal works
Under the deal, Microsoft will tap IREN’s infrastructure rather than build new facilities or secure additional power, accelerating access to high-performance AI compute while avoiding heavy upfront spending on chips that can quickly be superseded. Dell will supply IREN with Nvidia’s GB300 chips and related equipment under a contract worth roughly $5.8 billion, capacity that Microsoft will ultimately use.
IREN said in a regulatory filing that cash from Microsoft’s upfront payment will help finance part of the Dell order. The agreement includes a termination clause that allows Microsoft to exit if IREN fails to meet delivery timelines, underscoring the urgency around bringing new AI capacity online.
Why it matters
The partnership comes as demand for AI infrastructure surges across the tech sector, with recent earnings from major firms citing capacity constraints as a drag on growth. Microsoft has acknowledged those limits: CFO Amy Hood last week said the company now expects its AI compute crunch to persist until at least mid-2026, extending a prior expectation for relief by year-end.
Capacity and deployment
IREN’s footprint offers immediate scale. The company, whose market value stands at about $16.52 billion after its stock surged more than sixfold this year, operates multiple North American data centers with a combined 2,910 megawatts of capacity, all powered by renewable energy.
Nvidia processors for the deal will be deployed in phases through 2026 at IREN’s 750-megawatt campus in Childress, Texas. The site will add liquid-cooled data centers expected to deliver around 200 megawatts of critical IT capacity, expanding resources for training and running AI models.
Strategic implications
- Speed to capacity: Bypasses long lead times for power and construction.
- Financial flexibility: Reduces exposure to rapid chip depreciation cycles.
- Risk controls: Delivery-linked termination clause keeps execution on track.
Market impact and outlook
By leveraging IREN and Dell, Microsoft aims to scale AI services more quickly and flexibly, while limiting exposure to rapid chip depreciation and the long lead times for power and construction. Execution now hinges on IREN meeting schedule commitments and bringing the Texas capacity online as planned.
Headline: Microsoft seals $9.7B IREN pact for Nvidia AI chips
