IREN could be the next major Bitcoin miner to move to AI infrastructure following a multibillion-dollar deal with Microsoft, highlighting broader changes in the mining economy, according to a new Bernstein research report.
Bernstein analysts note that IREN’s AI cloud division is rapidly expanding, with approximately 150,000 GPUs already under contract and an estimated annual revenue run rate of $3.7 billion when fully operational.
Much of this capacity is tied to a long-term agreement with Microsoft, which commits to using GPU capacity for AI workloads over a five-year period. The deal also includes a significant upfront payment to customers, which will help finance infrastructure development.
IREN’s total GPU investments of approximately $5.8 billion are largely funded through a combination of Microsoft customer upfront and GPU-backed financing facilities, as well as additional cash and capital sources, allowing the company to keep borrowing costs relatively low.
Bernstein expects this change to fundamentally reshape the company’s business model.
“IREN will eventually discontinue its Bitcoin mining operations as it renovates its existing site to accelerate cloud adoption,” the analysts wrote.
Rather than shutting down operations completely, IREN is reusing existing mining infrastructure, particularly in Texas and British Columbia, by replacing ASIC mining rigs with GPUs designed for AI workloads.
Bernstein expects IREN’s AI cloud revenue to be its main source of revenue over the next few years. Source: Bernstein
Monday’s report suggests that mining revenue will decline over time and Bitcoin mining will gradually disappear into the legacy segment as power capacity is redirected to more profitable contracted AI computing.
IREN is not the only company exploring this axis. Several mining companies, including TeraWulf and HIVE Digital, have begun reallocating power and capital toward AI and high-performance computing, often in parallel with existing Bitcoin mining operations.
Related: AI data center gold rush sparks debate over impact on Bitcoin mining
Bernstein sees nearly 100% upside potential for IREN stock.
Bernstein set a $100 price target on IREN stock, noting there is significant upside potential as the company transitions from Bitcoin mining to AI infrastructure.
The stock is currently trading below $50, and the target implies an almost 100% upside from current levels.
Analysts maintained their Outperform rating after lowering their previous target to $125, reflecting a more conservative view on dilution and the gradual winding down of Bitcoin mining.
Airen stock. Source: Google Finance
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