Microsoft seals $9.7 billion deal with IREN for Nvidia chips

Nov 3 (Reuters) – In a bold move to keep up with the global race for artificial intelligence dominance, Microsoft has signed a massive $9.7 billion deal with data-center operator IREN, gaining access to Nvidia’s most advanced chips. The agreement aims to ease Microsoft’s ongoing struggle with limited computing power — a major roadblock that’s been holding the tech giant back from fully riding the AI wave.

The announcement sent IREN’s shares soaring over 20% in premarket trading on Monday. Meanwhile, Dell — which will supply IREN with Nvidia’s new GB300 chips and other gear worth about $5.8 billion — also saw its stock climb 5%. Microsoft plans to use this new equipment to strengthen its AI infrastructure.

This five-year partnership highlights just how desperate the AI industry has become for more computing muscle to power massive applications like ChatGPT. It follows recent tech earnings reports showing that even the biggest players are hitting a wall due to limited processing capacity — a clear sign that demand for AI is far outpacing supply.

By teaming up with IREN, Microsoft gets a clever shortcut: it can boost its computing power without building new data centers or fighting for extra electricity — two of the biggest obstacles currently slowing AI growth.

The deal also helps Microsoft avoid sinking billions into chips that could quickly lose value as even faster, smarter processors hit the market.

IREN, which now boasts a market value of $16.5 billion after its stock skyrocketed more than sixfold this year, runs multiple data centers across North America with a combined capacity of 2,910 megawatts, all powered by renewable energy.

According to IREN, the Nvidia processors will be installed gradually through 2026 at its massive 750-megawatt campus in Childress, Texas. The site will include new liquid-cooled data centers designed to deliver about 200 megawatts of crucial IT power.

IREN noted that the cash prepayment from Microsoft will help fund part of its $5.8 billion deal with Dell. However, the company also revealed that Microsoft can cancel the contract if IREN fails to meet the agreed delivery schedule.

Last week, Microsoft CFO Amy Hood admitted that the company’s AI capacity crunch will likely continue until mid-2026, pushing back earlier expectations that things would improve by the end of this year.