May 7 (Reuters) - Nvidia will invest up to $2.1 billion in data center operator IREN, as part of a broader deal to deploy up to 5 gigawatts of infrastructure to keep up with soaring artificial intelligence demand.
The tie-up, announced on Thursday, underscores the hunger for computing power amid surging adoption of AI, as frontier model developers and Big Tech firms funnel billions to secure capacity.
o Shares of IREN were up around 9% in extended trading. The stock had closed at $56.85 in regular hours.
o IREN has issued to Nvidia a five-year right to buy up to 30 million shares at an exercise price of $70 per share.
o All four U.S. tech giants reported results last week and signaled AI spending would not slow, with combined outlays set to surpass $700 billion this year.
o Thursday's partnership is intended to accelerate the deployment of large-scale AI factories by combining Nvidia's factory architecture with IREN's infrastructure operations, the companies said.
o Future deployments are expected to focus on IREN's 2-gigawatt Sweetwater campus in Texas.
o IREN last year signed a $9.7 billion cloud deal with Microsoft.
o The company is a so-called "neocloud" - firms that sell cloud computing services built on Nvidia's processors that allow Big Tech to access computing power without building new data centers.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila)
