IREN Pivots to AI Cloud Infrastructure via Strategic Microsoft Partnership

IREN is aggressively shifting its business model from Bitcoin mining to AI cloud infrastructure, a transition underscored by a strategic long-term partnership with Microsoft. According to a research report from Bernstein, the company is repurposing its existing power capacity in Texas and British Columbia by replacing ASIC mining rigs with GPUs designed for AI workloads. The pivot is supported by a significant financial framework. IREN is executing a roughly $5.8 billion GPU investment, funded through a combination of Microsoft customer prepayments and GPU-backed financing facilities. This structure is intended to keep borrowing costs relatively low while accelerating the buildout of its cloud capabilities. Bernstein analysts highlight that IREN has already contracted approximately 150,000 GPUs. Once the infrastructure is fully operational, the AI cloud division is estimated to reach an annual revenue run rate of $3.7 billion. The report suggests that Bitcoin mining will gradually become a legacy segment as power is redirected toward higher-margin, contracted AI computing. This move reflects a broader industry trend, with other firms such as TeraWulf and HIVE Digital also reallocating capital toward high-performance computing. Bernstein has assigned IREN a price target of $100 and maintained an Outperform rating, noting significant upside from current trading levels below $50, despite a slight reduction from a previous $125 target to account for potential dilution.