IREN has completed an upsized $2.6 billion convertible-note sale, just days after unveiling a major artificial intelligence infrastructure partnership with Nvidia. The capital raise, which was increased from its initial size, is designed to fund the company's ambitious pivot from bitcoin mining into AI cloud services.
The notes carry a 1.00% coupon and mature in 2033, with conversion rights under certain conditions. This funding comes on the heels of a broader strategic agreement announced May 7, under which Nvidia and IREN plan to deploy up to 5 gigawatts of Nvidia DSX-compatible AI data-center capacity across IREN's global network, with an initial focus on IREN's Sweetwater campus in Texas, which has 2 gigawatts of potential capacity.
As part of the deal, Nvidia secured a five-year option to purchase up to 30 million IREN shares at $70 each, representing a potential $2.1 billion stake subject to regulatory approval. This arrangement transforms Nvidia's role from a technology partner into a significant financial stakeholder, increasing the stakes for both companies in the success of the AI infrastructure rollout.
IREN shares traded at $56.56 in premarket activity, up 2.6% from the prior close. Nvidia shares edged 0.6% higher to $220.78, giving the chipmaker a market capitalization near $5.4 trillion. The modest gains suggest investors are weighing the potential of the AI infrastructure play against the dilution and execution challenges ahead.
The partnership builds on a separate five-year cloud agreement worth $3.4 billion, under which IREN will supply Nvidia with managed GPU cloud infrastructure for internal AI and research needs. That contract will utilize approximately 60 megawatts of IREN's existing data-center space at its Childress, Texas facility, equipped with air-cooled Blackwell systems.
Nvidia CEO Jensen Huang described AI factories as becoming foundational infrastructure for the global economy, emphasizing that successful rollouts require seamless integration of compute, networking, power, software, and operations. IREN co-CEO Daniel Roberts highlighted that the agreement combines Nvidia's AI technology with IREN's assets in power, land, and data centers.
Industry observers see Nvidia's deepening involvement as a strategic move to secure compute capacity for its customers. CoreWeave CEO Michael Intrator noted that Nvidia is covering its bases with infrastructure deals, but warned that if supply becomes too tight, customers might consider alternatives from AMD. AMD's data-center revenue jumped 57% year-over-year to $5.8 billion in the first quarter, driven by EPYC chips and Instinct GPU deliveries.
CoreWeave itself serves as a benchmark for the AI cloud infrastructure sector, reporting first-quarter revenue of $2.08 billion and a revenue backlog of $99.4 billion. The company has already surpassed 1 gigawatt of active power and targets over 8 gigawatts by 2030.
IREN's financial results underscore the challenges of its transition. Revenue for the March quarter fell to $144.8 million from $184.7 million in the prior quarter, and the company recorded a net loss of $247.8 million, largely due to non-cash impairments from shutting down bitcoin mining equipment. The company reports $3.1 billion in annual recurring revenue under contract, aiming to reach $3.7 billion by the end of 2026.
Analysts remain cautious about the path ahead. Freedom Capital Markets' Paul Meeks described the stock's decline following the debt announcement as an overreaction, but acknowledged that IREN faces years of heavy spending without near-term profitability. Morningstar's Luke Yang estimated that IREN could require tens of billions more in funding to expand its data-center footprint in Texas, Oklahoma, and British Columbia.
