Microsoft Corp. has signed a $9.7 billion cloud services contract with Australian artificial intelligence infrastructure provider IREN, a move that will give the software giant access to Nvidia’s advanced chips amid a global rush for computing power.
The five year agreement, announced Monday, marks one of Microsoft’s largest third party technology deals and underscores its aggressive investment in AI driven cloud services.
Under the terms, Microsoft will prepay roughly 20 percent of the total contract value, signaling a significant commitment to expanding its data center capacity and AI computing network.
The deal also follows Microsoft’s recent agreement with OpenAI, further consolidating its position as a leader in AI infrastructure.
Microsoft’s partnership with IREN comes as competition intensifies among global tech firms seeking to secure limited supplies of high end Nvidia GPUs the chips that power most of today’s large scale AI models.
The collaboration will allow Microsoft to integrate IREN’s GPU cloud infrastructure into its Azure platform, offering greater access to AI training and inference capacity.
“IREN’s expertise in building and operating a fully integrated AI cloud from data centers to GPU stack combined with their secured power capacity makes them a strategic partner,” Jonathan Tinter, Microsoft’s president of business development and ventures, said in a statement.
This collaboration unlocks new growth opportunities for both companies and the customers we serve. Microsoft has spent nearly $35 billion on capital expenditures during the July September quarter, nearly half of which went toward computing chips.
The remainder supported global data center expansion to accommodate rising demand for AI tools across industries. IREN, headquartered in Sydney, has rapidly grown into one of the largest AI cloud infrastructure providers outside the United States.
The company said it will purchase $5.8 billion worth of Nvidia chips and related equipment through Dell Technologies, deploying the hardware in phases across its Childress, Texas, campus.
Analysts described the Microsoft & IREN agreement as a significant signal of long-term confidence in the AI sector.
“Microsoft’s move shows that access to Nvidia GPUs has become a strategic priority,” said Kevin Hart, a technology analyst at GlobalData Research in London.
“AI computing resources are now as critical to tech firms as oil was to industrial economies in the twentieth century.”
Some experts also noted that the deal could help Microsoft hedge against potential supply chain disruptions.
“By partnering with a company like IREN, Microsoft diversifies its supply sources and strengthens its ability to meet global demand,” said Angela Patel, senior fellow at the Brookings Center for Technology Policy.
“It’s a prudent step, especially given ongoing chip shortages and power constraints in the United States and Asia.”
The collaboration highlights the growing interdependence between AI cloud providers and chip manufacturers.
Nvidia remains the dominant supplier of GPUs used for AI model training, giving it outsized influence in the global tech ecosystem.
The scale of Microsoft’s AI investments dwarfs most competitors. The company’s capital spending in the last quarter exceeded that of Amazon Web Services and Google Cloud combined, according to data from Refinitiv.
Microsoft’s cloud division, which includes Azure, reported revenue of $35.1 billion for the latest quarter, up 19 percent from a year earlier. Analysts attribute much of this growth to enterprise customers adopting AI powered tools and infrastructure.
In contrast, rival Alphabet Inc. announced plans to spend $12 billion this year on AI data centers, while Amazon.com Inc. expects about $17 billion in capital investments tied to its cloud expansion.
IREN’s deal with Dell further reflects the downstream demand created by such mega contracts.
The Australian company expects to roll out tens of thousands of Nvidia’s H100 and next generation Blackwell GPUs throughout 2026, giving Microsoft priority access as the chips come online.
In Childress, a small Texas town that will host much of IREN’s new infrastructure, local officials said the investment could bring economic benefits.
“We’re seeing new jobs, new businesses, and a sense of optimism,” said David Hughes, mayor of Childress. This partnership puts our community on the map as part of the global AI revolution. Residents however, voiced concerns about the potential environmental impact and increased energy consumption.
“We welcome the jobs, but people are worried about how much electricity these data centers will use,” said local resident Amanda Ruiz. “We hope the company keeps its promises on renewable energy.”
IREN has said its Texas facility operates on a mix of renewable and low carbon power sources and plans to expand its sustainable energy capacity alongside Microsoft’s broader commitment to carbon neutrality by 2030.
Industry observers expect the Microsoft IREN partnership to influence future data center and cloud infrastructure deals.
The agreement may also intensify the ongoing competition between major AI players, including Amazon, Google, and Meta, all of which are racing to secure advanced chips and power capacity.
“AI infrastructure is the new frontier,” said David Lin, an independent cloud technology consultant. Partnerships like this will determine who controls the computational backbone of the digital economy for the next decade.
As AI tools become more embedded in productivity software, cybersecurity systems, and consumer platforms, cloud service providers will need to maintain massive computational power to train and deploy models efficiently.
For Microsoft, the IREN deal represents not only an immediate boost to its cloud resources but also a strategic bet on the continued acceleration of AI adoption.
Microsoft’s $9.7 billion agreement with IREN underscores the scale and urgency of the global race for AI infrastructure.
By securing access to Nvidia’s chips through a trusted partner, the company aims to sustain its momentum in cloud computing and maintain a technological edge amid unprecedented demand for AI capabilities.
The deal also highlights how global cooperation, vast investment, and local impact now define the next phase of digital transformation one powered not by software alone, but by the hardware that enables intelligence itself.