What Does IREN Do? From Bitcoin Miner to AI Cloud Data Centers

IREN is an Australian-founded, Nasdaq-listed company that owns the land, grid connections, data centres and GPUs behind an AI cloud, and is switching off the Bitcoin miners that used to fill those halls. At 30 June 2026 it held executed grid connection agreements or equivalents for about 5 GW across the United States, Canada, Spain and Australia, ran about 40 MW of AI Cloud capacity, and was building four 50 MW (IT) liquid-cooled halls at Childress, Texas, for a five-year, $9.7 billion Microsoft contract. Microsoft accepted the first of them, Horizon 1, in August 2026. FY26 revenue was $707.0 million, of which $128.8 million came from AI Cloud.

AI DATA CENTERS · Data as at 8 Sep 2026 · Next update: after IREN's Q1 FY27 results or Horizon 2–4 delivery
Affects: AI Data Centers · Neoclouds · US · Australia

IREN is the first Bitcoin-miner-turned-AI-cloud on the AI Data Centers layer. The landlords already mapped here, such as Applied Digital and NEXTDC, build halls and rent the power to someone else's GPUs. IREN builds the hall, buys the GPUs and rents compute by the hour, so it sits on this layer and the Neoclouds layer at once. Read What Is an AI Data Center? first if the terms are new. Its newest Australian proposal has its own note: IREN's Redbank 900 MW plan near Wagga Wagga.

In short: IREN develops, owns and runs grid-connected data centres, fills them with its own NVIDIA and AMD GPUs, and sells that compute to hyperscalers, AI labs and enterprises on multi-year contracts. Its edge is power: about 5 GW of executed grid agreements, and an announced site list led by Childress (750 MW), the Sweetwater hub (2 GW), Kiowa in Oklahoma (1.6 GW) and Bundey in South Australia (800 MW). Most of the money is still ahead. IREN reports $4 billion of contracted annualised run-rate revenue for its 2026 capacity against $1 billion operating on 26 August 2026, and FY26 closed with a $702.6 million net loss after $638.8 million of impairments on retired Bitcoin hardware. The stuck step is building halls on the contract clock: Horizon 2–4 for Microsoft in Q4 2026, then about 0.8 GW (IT) cumulative by the end of 2027.

Education only, not advice to buy or sell any security. Figures are from IREN's Form 10-K for the year to 30 June 2026 and its FY26 results release (both 27 August 2026), its Microsoft contract release of 3 November 2025, its Horizon 1 release of 13 August 2026, its customer contracts release of 20 July 2026, its Bundey release of 3 June 2026, its Sweetwater release of 8 September 2026 and its Redbank project page, dated as shown. All $ figures are US dollars.

Numbers that matter

Grid agreements

~5 GW

Executed grid connection agreements or equivalents in the US, Canada, Spain and Australia · 30 Jun 2026

Secured

Microsoft contract

$9.7bn

Five years of GB300 GPU cloud at Childress, 20% prepaid; Horizon 1 of 4 accepted Aug 2026 · 3 Nov 2025

Signed

Contracted ARR, 2026 capacity

$4bn

$1bn operating on 26 Aug 2026; ARR is an operating metric, not GAAP revenue · 27 Aug 2026

Building

FY26 revenue

$707.0m

AI Cloud $128.8m (about 8x), Bitcoin $578.2m; net loss $(702.6)m · year to 30 Jun 2026

Paid

Contracted backlog

$16.6bn

$5.1bn remaining performance obligations + ~$11.4bn lease contracts · 30 Jun 2026

Contracted

Delivery target (IT)

0.3 → 0.8 GW

Cumulative IT capacity by end-2026 and end-2027; 480 MW and 1.2 GW gross · 27 Aug 2026

Building

Status chips are Second Order's read. IREN names Microsoft, NVIDIA and several AI developers as customers, but it has not named the frontier AI lab behind its August 2026 contract, so we do not either.

What does IREN actually do?

Secure the power. Build the hall. Rent the GPUs.

Power first. Halls second. GPUs and software on top.

1. It secures grid power and land, then builds its own data centres. IREN develops, owns and operates its sites, including the substations. The 10-K project table lists Canal Flats (30 MW), Prince George (50 MW) and Mackenzie (80 MW) in British Columbia; Childress (750 MW), Sweetwater 1 (1,400 MW) and Sweetwater 2 (600 MW) in Texas; Kiowa, Oklahoma (1,600 MW); Bundey, South Australia (800 MW); and Badajoz, Spain (300 MW), all in gross MW. It prefers grid connections to on-site generation, and says every operating site has run on renewable energy or certificates since it started.
2. It fills those halls with its own GPUs. Installed and on order at 30 June 2026 were AMD MI350X and NVIDIA H100, H200, B200, B300, GB300 and VR200 systems. IREN rents them as bare metal or as a managed cloud. For the Microsoft contract alone it agreed to buy about $5.8 billion of GB300 systems and ancillary equipment from Dell. A separate five-year, $3.4 billion contract with NVIDIA, signed in May 2026, supports NVIDIA's internal AI and research work.
3. It adds software and is switching off Bitcoin. The Mirantis acquisition, completed on 4 August 2026 for about $544 million, adds workload orchestration, monitoring and enterprise support. Bitcoin mining still ran about 23.2 EH/s on roughly 380 MW of data centre capacity at 30 June 2026; IREN aims to substantially finish moving that capacity to AI Cloud by 31 December 2026.

Co-founder and co-CEO Daniel Roberts puts the thesis in one line in the FY26 release: "the digital world can scale almost instantly, but the physical world cannot." IREN's bet is that whoever already owns energised land and substations gets paid first.

The near-term clock is Childress. Microsoft's contract runs through four 50 MW (IT) liquid-cooled tranches, Horizon 1 to 4. Horizon 1 was delivered and accepted in August 2026, and NVIDIA's testing there earned IREN Exemplar Cloud status on GB300 NVL72. Horizon 2 to 4 are targeted for calendar Q4 2026, with contract grace periods running from mid-Q4 2026 to the beginning of Q2 2027. The 10-K puts operating AI Cloud capacity at about 40 MW on 30 June 2026; the company targets about 0.3 GW (IT) cumulative by the end of 2026 and 0.8 GW (IT) by the end of 2027, or 480 MW and 1.2 GW in gross terms.

Then comes scale beyond Childress. At Sweetwater 1 the high-voltage substation was energised earlier in 2026, and 300 MW (gross) of data centre capacity is under construction for delivery in Q4 2027. On 8 September 2026 IREN said ERCOT had conditionally included the 2 GW Sweetwater hub in its Batch Zero process as base load, still subject to approvals. In Australia, Bundey has a transmission connection agreement for four 330 kV feeder exits, is on track to start energisation from 2028, and has subsea fibre into Singapore, Indonesia, South Korea and Japan. The separate 900 MW Redbank proposal near Wagga Wagga targets initial energisation in 2029, and IREN's page says the project will fund its own network connection.

How does IREN make money?

It is paid per GPU-hour on multi-year compute contracts and, for now, in Bitcoin. FY26 (year to 30 June 2026) in order:

• AI Cloud Services revenue: $128.8 million, about eight times FY25's $16.4 million. In the June quarter it reached $70.5 million, ahead of Bitcoin mining's $66.7 million.
• Bitcoin mining revenue: $578.2 million from mining and selling 6,075 Bitcoin, up from $484.6 million. This line shrinks as miners are retired to free power for GPUs.
• Profit: adjusted EBITDA $245.7 million (FY25 $269.7 million). Net loss $702.6 million, after $638.8 million of non-cash impairments, mostly on decommissioned mining hardware, $417.7 million of depreciation and amortisation, and $449.1 million of selling, general and administrative costs.
• Contracted, not yet earned: $5.1 billion of remaining performance obligations plus about $11.4 billion of contracted lease arrangements, $16.6 billion together at 30 June 2026. On 20 July 2026 IREN put its contracts' weighted average term at about four years.
• Pricing: IREN says recent three-year contracts bring in more than $20 million of revenue per MW (IT), about a two-year payback on GPU capex, with customer prepayments covering 45–55% of GPU capex.

Our arithmetic. Microsoft's $9.7 billion over five years averages about $1.94 billion a year (9.7 ÷ 5). Spread across 200 MW (IT) of Horizon capacity, that is roughly $9.7 million per MW (IT) per year (1,940 ÷ 200). That is GPU cloud revenue that includes the chips IREN buys, so it is not comparable with a landlord's rent per kilowatt. FY26 cash capex was about $4.33 billion ($2,998.0 million of property, plant and equipment plus $1,335.1 million of computer hardware), six times revenue (4,333 ÷ 707). Operating cash flow of $2,100.4 million was lifted by $1,841.7 million of deferred revenue, which is customer prepayments: cash in before service. In the June quarter AI Cloud passed Bitcoin for the first time; the first nine months of FY26 brought $58.3 million of AI Cloud revenue against $511.5 million from mining (128.8 − 70.5 and 578.2 − 66.7).

Who funds the build. Customers first, through prepayments: 20% of each Microsoft tranche is paid before delivery. Then GPU-backed debt: about $3.6 billion of investment-grade financing for the Microsoft GPUs at a 6.0% weighted rate, which with prepayments funds 96% of that GPU capex, and $2.8 billion of newer GPU financings, including $2.4 billion led by Blue Owl and PIMCO-advised investors at 9.0% fixed for the Mackenzie air-cooled expansion. Then the capital markets: FY26 brought $4.74 billion of share issuance and $6.30 billion of convertible notes. At 30 June 2026 IREN held $5.90 billion of cash plus $1.72 billion restricted, against $7.59 billion of debt (our arithmetic: 169.4 + 7,423.6).

Who gets paid. Dell, NVIDIA and AMD on GPU orders; builders at Childress and Sweetwater; utilities and grid operators on power; lenders on GPU debt. Who pays. Microsoft, NVIDIA and AI developers on multi-year compute contracts. Money sticks when a hall is accepted and billing starts. Until then, prepayments sit as deferred revenue and the interest clock runs.

What limits it?

Delivery first. Concentration second. Capital third.

1. Revenue starts only on acceptance. The 10-K says revenue generally begins only after compute is delivered, commissioned, placed in service and accepted. Horizon 2 to 4 must land in Q4 2026, inside grace periods that end at the beginning of Q2 2027, and IREN lists service credits, damages and termination rights among the risks of late delivery.
2. Two customers carry most of the book. The 10-K says the Microsoft ($9.7 billion) and NVIDIA ($3.4 billion) contracts "represent a substantial majority of our contracted revenue." It also flags that some newer customers are early-stage private AI companies, which adds counterparty credit risk.
3. The build keeps needing capital. IREN says it will need "a substantial and increasingly larger amount of additional capital". FY26 cash capex was about $4.33 billion against $707.0 million of revenue (our arithmetic), and GPUs age fast: the FY26 impairments show how quickly hardware value can be written down.
4. Power is secured on paper, not yet in halls. About 5 GW of grid agreements sits against about 40 MW of AI Cloud operating at 30 June 2026 and a 0.8 GW (IT) target for the end of 2027. ERCOT's Sweetwater classification is conditional. Bundey and the Redbank proposal still need Australian planning, environmental and grid steps, and the 10-K flags water and diesel supply risks specific to Australia.

Where the filings are silent we say so. IREN does not name the frontier AI lab behind its August 2026 contract, give revenue by customer or by site, state an electricity cost per MWh for its AI halls, or publish a hall-by-hall live-MW table, so we do not estimate those.

Who else does this?

Roles, not a league table.

What separates IREN is that it owns every layer. Applied Digital and NEXTDC rent power and space, and their tenants carry the GPU risk. CoreWeave and Crusoe rent GPUs too, but IREN pairs that with freehold sites and its own substations. It keeps more of each megawatt's revenue and carries more of each megawatt's risk: GPU obsolescence, customer concentration and construction delay all land on one balance sheet.

What would change this view?

The read on the model weakens if:

• Horizon 2 to 4 slip past the contract grace periods, triggering credits or giving Microsoft termination rights.
• Contracted ARR stops converting, with operating ARR still far below the $4 billion contracted for 2026 capacity well into 2027.
• A major customer cuts committed capacity or fails to pay, given that the Microsoft and NVIDIA contracts make up most of the book.
• GPU financing terms worsen: rates rise above the 6.0% and 9.0% levels just secured, or prepayments fall below the 45–55% of GPU capex IREN now cites.
• ERCOT's conditional Batch Zero status for Sweetwater, or Australian approvals for Bundey and Redbank, fall through or push energisation out.

It stays intact while Childress halls are accepted on schedule, operating ARR climbs toward the contracted figure, new contracts keep prepayments and pricing near current levels, and Sweetwater 1's first 300 MW lands in Q4 2027.

Practical takeaways

• IREN is a vertically integrated AI cloud: it owns the grid connections, the halls and the GPUs. It is not a landlord, and it is no longer mainly a Bitcoin miner.
• About 5 GW of executed grid agreements; about 40 MW of AI Cloud operating at 30 June 2026; targets of 0.3 GW (IT) by the end of 2026 and 0.8 GW (IT) by the end of 2027.
• FY26 revenue $707.0 million (AI Cloud $128.8 million); net loss $702.6 million after $638.8 million of impairments; $16.6 billion of contracted backlog.
• Our arithmetic: the Microsoft contract averages about $1.94 billion a year, roughly $9.7 million per MW (IT) per year including GPUs; FY26 cash capex was about $4.33 billion.
• The stuck step is turning secured power into accepted halls on the contract clock, funded by prepayments and GPU debt.

FAQ

What does IREN do?
IREN is a Nasdaq-listed, Australian-founded AI cloud company. It develops and owns grid-connected data centres, fills them with its own NVIDIA and AMD GPUs and rents that compute to hyperscalers, AI labs and enterprises. It still mines Bitcoin but aims to substantially finish moving that capacity to AI cloud by 31 December 2026.

Is IREN still a Bitcoin miner?
Partly, for now. At 30 June 2026 it ran about 23.2 EH/s of Bitcoin mining on about 380 MW of data centre capacity and earned $578.2 million from mining in FY26. In the June 2026 quarter AI Cloud revenue ($70.5 million) passed mining revenue ($66.7 million) for the first time, and IREN is retiring miners to free power for GPUs.

What is IREN's Microsoft contract?
A five-year GPU cloud services contract signed in November 2025, worth about $9.7 billion with a 20% prepayment, for NVIDIA GB300 GPUs in four 50 MW (IT) liquid-cooled Horizon halls at Childress, Texas. Microsoft accepted Horizon 1 in August 2026; Horizon 2 to 4 are targeted for Q4 2026.

Where are IREN's data centers?
British Columbia, Canada (Canal Flats, Prince George, Mackenzie); Texas (Childress, Sweetwater 1 and 2); Oklahoma (Kiowa); South Australia (Bundey); and Badajoz, Spain. A separate 900 MW Redbank proposal near Wagga Wagga, New South Wales, targets initial energisation in 2029.

How does IREN make money?
Mainly from multi-year AI cloud contracts priced per GPU-hour, plus Bitcoin mining while it winds down. FY26 revenue was $707.0 million: $128.8 million from AI Cloud and $578.2 million from Bitcoin. IREN reports $4 billion of contracted annualised run-rate revenue for its 2026 capacity, with $1 billion operating on 26 August 2026.

Is IREN a good investment?
We do not make buy or sell calls, and nothing here is a recommendation. We can tell you what it owns, how it gets paid and which numbers would change the picture. The decision is yours.

Keep reading on the map

• The layers: AI Data Centers · Neoclouds
• The terms: What Is an AI Data Center? · How Long Does It Take to Build an AI Data Center?
• The money: What Is GPU Financing?
• GPU clouds: What Does CoreWeave Do? · What Does Crusoe Do?
• Landlords for comparison: What Does Applied Digital Do? · What Does NEXTDC Do?
• Where it happens: US · Australia · IREN Redbank catalyst

The members cut on a stuck step is already live: When utilities bill data centers before power, where does cash stick?. This page stays the free Stack read of the IREN model.

Sean

Writes Second Order by TKN — a plain-English map of AI infrastructure. Who gets paid, where money sticks, which step is stuck. Not investment advice.

Author page → · Editorial standards →

How we check this

Figures come from IREN's Form 10-K for the year ended 30 June 2026 and its FY26 results release, both of 27 August 2026; its Microsoft contract release of 3 November 2025; its Horizon 1 release of 13 August 2026; its customer contracts release of 20 July 2026; its Bundey release of 3 June 2026; its Sweetwater release of 8 September 2026; and IREN's Redbank project page, plus the peer filings listed below, each dated. Where we work something out ourselves, the arithmetic is shown in full. IREN does not name the frontier AI lab behind its August 2026 contract, give revenue by customer or site, state an electricity cost per MWh for its AI halls, or publish a hall-by-hall live-MW table, so we do not estimate those. Media reports about unannounced customers are not used.

Last reviewed: 18 Oct 2026 · Next review: after IREN's Q1 FY27 results or Horizon 2–4 delivery
Spot an error? Tell us and we will correct it and note the change here.
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References

1. IREN, Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (company, SEC filing), 27 Aug 2026 — three-layer model, ~5 GW executed grid agreements, ~40 MW AI Cloud operating, project table by site, 23.2 EH/s on ~380 MW of mining, Horizon delivery terms and grace periods, Microsoft and NVIDIA concentration, RPO $5.1bn + leases $11.4bn, Mirantis and Nostrum, 685 employees, risk factors
2. IREN, IREN Reports FY26 Results (Exhibit 99.1) (company, SEC exhibit 99.1), 27 Aug 2026 — FY26 revenue by line, net loss, impairments, adjusted EBITDA, cash flow and balance sheet, $4bn contracted / $1bn operating ARR, >$20m per MW (IT) pricing, prepayments, GPU financings, 0.3 GW / 0.8 GW (IT) delivery targets
3. IREN, IREN Secures $9.7bn AI Cloud Contract with Microsoft (Exhibit 99.1) (company, SEC exhibit 99.1), 3 Nov 2025 — five-year GB300 contract, ~$9.7bn total value, 20% prepayment, ~$5.8bn Dell purchase, 200 MW (IT) Horizon 1–4 at the 750 MW Childress campus
4. IREN, IREN Delivers Horizon 1 to Microsoft and Achieves NVIDIA Exemplar Cloud Status on GB300 NVL72 (Exhibit 99.1) (company, SEC exhibit 99.1), 13 Aug 2026 — Horizon 1 delivered and accepted, first of four 50 MW (IT) liquid-cooled deployments, 480 MW (gross) 2026 and 1.2 GW (gross) 2027 targets
5. IREN, IREN Signs $2.8bn in New Customer Contracts with Leading AI Developers, Raises 2026 ARR Target to over $4bn (Exhibit 99.1) (company, SEC exhibit 99.1), 20 Jul 2026 — named customers, ~85% of >$4bn ARR target under contract, ~45% prepayments, ~4-year weighted average contract term
6. IREN, IREN Announces First Australian Data Center Campus - 800MW in South Australia (company press release), 3 Jun 2026 — Bundey 800 MW, four 330 kV feeder exits, energisation from 2028, subsea fibre to Singapore, Indonesia, South Korea and Japan
7. IREN, IREN's 2GW Sweetwater Hub Included as Base Load in ERCOT Batch Zero (company press release), 8 Sep 2026 — Sweetwater 1 (1,400 MW) and 2 (600 MW) conditionally in ERCOT Batch Zero; Sweetwater 1 substation energised; 300 MW (gross) targeted Q4 2027
8. IREN, Redbank Data Centre (project community page) (company project page), Oct 2026 (read 18 Oct 2026) — 900 MW total planned capacity near Wagga Wagga, 2029 target initial energisation, project funds its own network connection, closed-loop cooling
9. Applied Digital, Applied Digital Reports Fiscal First Quarter 2027 Results (company), 7 Oct 2026 — 1.41 GW leased, 250 MW live, about $36bn contracted, HPC and hosting revenue, debt and cash
10. NEXTDC, FY26 Record Results and Record FY27 Growth Guidance (ASX release) (company, ASX filing), 27 Aug 2026 — contracted and billing MW, forward order book, FY27 guidance, capex, liquidity, power position