Data center operator Iren (IREN 2.30%) is positioning itself to be a leader of the artificial intelligence (AI) boom. It's inking some impressive deals for its cloud infrastructure, including a five-year $3.4 billion deal it signed last month with Nvidia (NVDA 0.84%).
That deal covers 60 megawatts (MW) worth of computing capacity in Iren's Childress, Texas, data center. The terms of that deal could also be helpful for assessing Iren's newly announced 800 MW site in Australia, especially in the broader context of how quickly Iren has added more energy capacity.
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Iren is adding gigawatts faster than anyone else
The new Australian data center campus boosts Iren's total pipeline to 5.8 gigawatts (GW) of infrastructure that will eventually be made available for tech giants and others. Iren's 1.4 GW Sweetwater 1 facility was energized earlier this year, and the Australian site is expected to be energized in 2028.
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Key Data Points
Nor was that the only site Iren has added this year. The company announced in February that it acquired a 1.6 GW site in Oklahoma. Combine that with a 490 MW acquisition in Europe, and Iren has doubled the amount of gigawatts in its pipeline in less than six months. Iren closed 2025 with 2.9 GW of grid-connected, contracted power, and now has a 5.8 GW portfolio.
Iren's three deals so far this year have been for sites with 1.6 GW, 800 MW, and 490 MW. These aren't small deals, and now that Iren has sites in Europe and Australia, it should be easier to gain share in those markets. The trend suggests that Iren will have even more energy capacity contracted by the end of the year.
Why loading up on gigawatts matters
Looking at Iren's deal with Nvidia will shed some light on why gigawatts matter. That deal secured an annual rate of $11.33 million per megawatt for five years. Assuming that rate holds across a 5.8 GW portfolio, Iren is looking at $65.7 billion per year in recurring revenue.
More gigawatts increases Iren's earnings potential, especially as it energizes more sites. Tech giants have been scrambling to get access to more computing power for AI, and Iren has already established itself by serving some of the largest companies in the industry. It may also get more difficult to secure energy in the future due to competition, activism, and the lengthy timetables for building new generation sources.
Commentary from Iren CEO Daniel Roberts suggests the company is still aggressively building out its gigawatt pipeline. When announcing the acquisition of European data center provider Nostrum Group, Roberts said that the acquisition "supports the next phase of growth."
Converting gigawatts into revenue
The math for the company to hit $65.7 billion in annual recurring revenue adds up, but the question of how effectively Iren will be able to convert the potential from those contracted power supplies into the tangible reality of operating, revenue-generating data centers is the elephant in the room.
Management recently raised its target annual revenue run rate from $3.7 billion to $4.4 billion, so the company is making progress.
"Securing capacity and accelerating commissioning are our top priorities in a market where time-to-compute is everything," Roberts said recently when raising the annual recurring revenue target.
Not only will it be a tall order to turn all that energy capacity into revenue, but it also costs a lot of money to construct data centers and buy the necessary AI accelerators and other chips. For instance, Iren recently closed a $3 billion convertible note offering and $3.65 billion in GPU financing.
Banks are willing to give Iren competitive interest rates and terms on its debt, signaling that there is enough trust from financial institutions that Iren can translate gigawatts into scalable revenue. Iren will eventually announce bigger deals due to the high demand for AI compute and how much capacity the company has already energized.
Investors will also have to wait patiently for margins to improve. However, once its AI data centers are generating sizable profits, Iren will be positioned to benefit due to its focus on accumulating as much capacity as possible.
