Shares of Iren Limited (IREN 14.45%) rallied 11.2% on Monday, as of 12:23 p.m. ET.
Iren is one of several former Bitcoin miners with established GPU-filled data centers currently converting its data center fleet to become an artificial intelligence (AI) neocloud.
Today, another massive deal between OpenAI and the semiconductor ecosystem increased everyone's estimates for the computing demand over the next several years, at least. If AI demand is truly as "insatiable" as today's deal and other recent announcements indicate, Iren's demand should continue to be very strong.
OpenAI-AMD signals even more demand for AI
On Monday, OpenAI and Advanced Micro Devices announced a massive, multiyear deal, in which OpenAI will commit to purchasing AMD's line of AI GPUs, with OpenAI also getting a stake in AMD through warrants in return for the massive purchase commitment.
Under the terms of the deal, OpenAI committed to buying 6 gigawatts worth of AMD's Instinct series GPUs, beginning with the MI450, which is scheduled for release in the second half of 2026. That is an absolute massive amount of spending, as each gigawatt amounts to tens of billions in chips, according to AMD as reported by The Wall Street Journal. In terms of power, 1 gigawatt equals roughly an entire nuclear power plant. As part of the deal, OpenAI will also receive warrants to buy up to 160 million shares of AMD at $0.01 per share -- essentially, for free -- if OpenAI hits its purchase commitments. That's a huge stake in AMD, amounting to about 10% of the company.
The deal of course doesn't have anything to do with Iren, though the announcement did mention that OpenAI will purchase AMD chips, "either directly or through its cloud computing partners."
That could mean renting AMD chips from various neoclouds, such as Iren, or peers CoreWeave and Nebius. Last month, Iren announced it had purchased 1,100 AMD GPUs, along with another 11,300 Nvidia GPUs, essentially doubling its GPU count. Iren thus has access to increasingly scarce GPU supply, likely afforded by its ready access to 2.91 GW of power and another 750 MW of contracted power as of last quarter.
Image source: Getty Images.
Everything AI is going straight up
It's an exciting time to be an investor in AI infrastructure, whether in semiconductors, semiconductor equipment, clouds, or neoclouds. However, one can't help but be a little bit nervous at the sheer scale of the numbers OpenAI and the chip ecosystem are talking about. The massive amount of spending and promise of AI technology is very exciting; however, the internet was also exciting, but that buildout resulted in a huge bubble bursting before things recovered and the promise of "winning" internet stocks came to fruition.
