Microsoft Signs $9.7 Billion Deal with IREN for Nvidia AI Chips

Microsoft has sealed a five-year contract with data-centre operator IREN worth $9.7 billion, securing access to Nvidia’s next-generation GB300 AI chips. The move is part of Microsoft’s strategy to expand its AI computing power without overextending on new data centre construction or capital costs.

Under the deal, IREN will procure Nvidia hardware via a $5.8 billion agreement with Dell, and deploy the equipment at its 750-megawatt campus in Childress, Texas. Microsoft will make a 20 percent upfront payment to help fund the investment. Deployment of the chips is scheduled to roll out through 2026 in phases.

IREN, which already operates substantial renewable-powered data centres in North America, said its facilities would be upgraded with new liquid-cooling systems to support the incoming workload. The agreement also includes milestone clauses — failure to meet delivery targets may jeopardize the contract’s continuation.

Analysis / Impact:
This deal signals how intense the competition for AI infrastructure has become. Microsoft had been feeling the pinch as demand for compute power outstripped its existing capacity. By partnering with IREN, it sidesteps the delays and expense of building wholly new facilities.

For IREN, the agreement marks a transformation. Once known largely for its Bitcoin-mining operations, it is rebranding itself as a high-performance AI infrastructure provider. The inflow of capital from Microsoft will help accelerate its shift toward GPU-powered cloud services.

From a market perspective, the agreement also benefits Nvidia and Dell. Both will see demand for their products increase as Microsoft leans heavily on their technology. It underscores how essential partnerships and ecosystems are becoming in the AI arms race.

That said, execution risks are significant. Deploying cutting-edge hardware at scale is complex. Power, cooling, logistics, supply chain constraints, and meeting deadlines are major challenges. If any link in this chain fails, the ripple effects will hurt all parties.

In short: Microsoft’s pact with IREN is a bold bet on outsourcing expansion of AI capacity, while IREN transitions into a central player in the AI cloud ecosystem. Success hinges not just on ambition, but on flawless execution.