Microsoft has signed a $9.7 billion agreement with data center operator IREN to secure access to Nvidia’s latest AI processors, a move aimed at easing the severe computing capacity shortage that has constrained the company’s ability to scale its artificial intelligence services.
Under the multi-year deal, IREN will provide Microsoft with high-performance data center capacity powered by Nvidia’s GB300 chips and equipment supplied by Dell Technologies, valued at roughly $5.8 billion, according to a regulatory filing from IREN.
The announcement sent IREN shares up more than 20% in premarket trading on Monday, while Dell rose 5%, reflecting investor optimism around the accelerating demand for AI infrastructure.
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The deal represents one of Microsoft’s largest third-party infrastructure partnerships to date, designed to expand cloud capacity without massive upfront hardware investments.
By outsourcing part of its chip and data center needs, Microsoft will avoid steep capital spending on rapidly depreciating processors, while ensuring consistent access to the GPUs critical for training large AI models behind products like Copilot and ChatGPT.
According to Microsoft CFO Amy Hood, the company expects its AI capacity constraints to persist through at least mid-2026, after previously anticipating relief by the end of 2025.
IREN, which operates multiple renewable-powered data centers across North America with a total capacity of 2,910 megawatts, will deploy the Nvidia hardware in phases through 2026 at its 750-megawatt Childress, Texas campus, the company said.
The new facility will feature liquid-cooled data centers delivering about 200 megawatts of critical IT capacity. Cash from Microsoft’s prepayment will help fund IREN’s $5.8 billion procurement deal with Dell.
However, IREN noted in a filing that the Microsoft contract could be terminated if it fails to meet equipment delivery timelines.
Microsoft’s agreement with IREN shows how major cloud providers are racing to secure AI hardware amid a global shortage of Nvidia chips.
The tech giant has already been expanding its in-house silicon efforts and investing heavily in Azure AI infrastructure, but supply bottlenecks have limited how fast it can deploy new AI services across its platforms.
IREN, formerly known as Iris Energy, has seen its market value surge more than sixfold in 2025 to about $16.5 billion, reflecting its growing importance in the AI data center ecosystem.