Shares of bitcoin mining companies saw significant gains after Iren, an Australia-based miner, announced new multiyear contracts for its artificial intelligence cloud services. The agreements involve the deployment of advanced Nvidia Blackwell graphics processing units (GPUs) and signal a growing trend of crypto miners diversifying their operations into the high-demand AI sector.
Key Takeaways
- Iren announced new multiyear cloud service contracts with major AI companies for Nvidia Blackwell GPUs.
- The company has secured contracts for 11,000 of its 23,000 GPUs, representing $225 million in annualized revenue.
- Iren targets over $500 million in annualized run-rate revenue from its AI business by the first quarter of 2026.
- The news prompted a rally in stocks for Iren (IREN), Bitfarms (BITF), and HIVE Digital Technologies (HIVE).
Iren's Strategic Expansion into AI Services
Iren has formalized its move into the artificial intelligence market by securing new long-term agreements with what it describes as "leading AI companies." These contracts are centered on providing cloud computing services powered by Nvidia's next-generation Blackwell GPUs.
The company confirmed it is expanding its AI cloud capacity to 23,000 GPUs. According to the announcement, customer contracts are already in place for 11,000 of these units. This initial commitment is expected to generate $225 million in annualized run-rate revenue (ARR) once the GPUs are operational by the end of 2025.
This development is part of a larger strategy to achieve more than $500 million in annualized revenue from its AI division by the end of the first quarter of 2026. Iren noted that demand for its Nvidia Blackwell GPUs remains high, with contracts being signed on average two years before the hardware is delivered.
Financial Projections
Iren stated that the pricing for its GPU contracts supports an approximate two-year revenue payback period, indicating a potentially profitable venture into the AI compute market.
Infrastructure and Future Growth Potential
To support its ambitious AI goals, Iren is leveraging its significant infrastructure, originally developed for its cryptocurrency mining operations. The company has already secured nearly 3 gigawatts (GW) of power capacity across its North American sites.
Iren's current campuses in British Columbia, Canada, along with two new sites under construction in Texas known as Horizon 1 & 2, have the combined capacity to house over 100,000 GPUs. This existing power and land portfolio provides substantial room for future expansion as demand for AI computing continues to grow.
"Iren is uniquely positioned to meet accelerating demand for AI compute," said Co-CEO Daniel Roberts. "With nearly 3 GW of grid-connected power across North America and a cloud services business scaling in size and reputation, we believe IREN is well positioned to scale with the rapid growth in AI compute needs."
The company's relationship with Nvidia was strengthened in August when it was named a "Nvidia preferred partner," a designation that enhances its credibility and access within the AI hardware ecosystem.
Why Miners are Pivoting to AI
Bitcoin mining is an energy-intensive process that requires large data centers with specialized hardware and access to substantial, low-cost electricity. These exact same resources are also critical for training and running large-scale AI models. This operational synergy makes AI cloud services a natural diversification strategy for mining companies seeking new revenue streams.
Market Reaction and Sector-Wide Gains
The announcement had an immediate positive impact on Iren's stock and other publicly traded bitcoin miners that are also exploring AI services. Investors appear to view the diversification into AI as a significant growth driver for the sector.
Stock Performance Highlights
- Iren (IREN): Shares surged 3.5% on Tuesday, reaching new record highs. The stock has experienced a remarkable rally of over 488% year-to-date.
- Bitfarms (BITF): The stock jumped 6%, building on a 15% gain from the previous day. Year-to-date, Bitfarms is up 132%.
- HIVE Digital Technologies (HIVE): Shares advanced 4% on Tuesday, following a 25% vault on Monday. The stock has gained 95% so far in 2025.
This coordinated rally suggests that the market is rewarding crypto miners for their strategic pivots toward the high-growth AI compute industry, leveraging their existing infrastructure to tap into a new and lucrative market.
Cryptocurrency Market Remains Strong
The positive news in the mining sector coincided with continued strength in the broader cryptocurrency market. Digital assets maintained their gains from the start of the week, with major currencies trading near recent peaks.
Bitcoin (BTC) set a new all-time high of $126,198 on Monday, surpassing its previous record from mid-August. On Tuesday, the leading cryptocurrency was trading around $123,500. It has risen more than 9% over the past week and is up 34% for the year.
Ethereum (ETH), the second-largest cryptocurrency, also showed strong performance. It traded near $4,700, marking a 13% increase over the past seven days and a 42% gain year-to-date. The sustained rally in crypto prices provides a stable foundation for mining companies as they expand into new business areas.