IREN has delivered and received formal acceptance of Horizon 1, the initial phase of its multi-site AI cloud deployment for Microsoft, marking the first operational milestone under a five-year, $9.7 billion cloud services agreement signed in November 2025.

The 50-megawatt (IT load) facility is located at IREN’s Childress, Texas campus, a site previously used for Bitcoin mining operations that is now being converted for large-scale artificial intelligence workloads. Horizon 1 employs direct-to-chip liquid cooling and runs on Nvidia GB300 NVL72 systems. It forms the opening installment of four planned 50MW deployments scheduled for completion during 2026, which together will provide 200 megawatts of dedicated IT capacity.

Technical Validation and Operational Details

Following testing by Nvidia, Horizon 1 received Exemplar Cloud status, a designation given to providers that meet the company’s performance and reliability standards for AI workloads. Microsoft has a defined acceptance window after each GPU deployment is completed; once validation is confirmed, the service period begins and monthly billing under the contract can commence.

The full agreement is structured to generate approximately $1.94 billion in annualized revenue once all four Horizon phases are operational. Microsoft is required to pay 20 percent of the total contract value upfront across four tranches.

Roberts also credited the more than 3,000 people on the site team whose work enabled the rapid build-out. IREN’s vertically integrated approach keeps data-center design, engineering and construction under direct company control rather than relying on external contractors.

Expansion Targets and Financing

The remaining three Horizon phases are expected to be delivered later in 2026. Beyond the Microsoft contract, IREN is targeting 480 megawatts of gross AI cloud capacity by the end of 2026 and 1.2 gigawatts by 2027 as it continues shifting resources away from Bitcoin mining.

To support the GPU requirements tied to the Microsoft deal, the company secured a $3.65 billion debt package in June. The financing, which carries investment-grade ratings of A from Fitch and A(low) from DBRS, covers roughly 96 percent of the $5.81 billion in planned GPU spending. Hardware is being sourced primarily through Dell.

Management has stated that contracts already cover about 85 percent of a broader company target of more than $4 billion in annualized AI-cloud revenue by year-end. Current AI-cloud revenue remains far below that level, with recent quarterly figures annualizing near $134.5 million, illustrating the scale of ramp required.

Market Response and Ongoing Transition

IREN shares advanced sharply in the sessions following the announcement, rising as much as 9 to 12 percent and extending a prior-week gain of approximately 22 percent. The company continues to operate Bitcoin mining capacity even as it redirects cash flow and power assets toward AI infrastructure. Sites in Texas, Oklahoma and British Columbia form part of its existing footprint, with additional expansion plans in South Australia and a recent acquisition of a Spanish data-center developer.

Next earnings are anticipated around late August, with early estimates pointing to roughly $165 million in revenue and a per-share loss. The delivery of Horizons 2 through 4, conversion of contracted capacity into recognized revenue, and the pace of the mining-to-AI transition remain the primary near-term checkpoints for the company.