$IREN 👀
A lot of questions this week on funding, so here's how a GPU typically gets funded at $IREN.
First, the customer signs a multi-year take-or-pay contract and agrees to a prepayment. On our recent 3-year contracts, prepayments have been 45% to 55% of the associated GPU capex.
Second, financing is committed, secured by the contracted GPUs. On the Microsoft contract we secured an A-rated facility at around 6%, which together with prepayments covers 96% of GPU capex. More recently, for a non-investment grade counterparty at Mackenzie, we secured financing at 9% fixed, which together with prepayments covers more than the full cost of the GPUs.
That's the GPU side. The data centers are a separate, long-term asset base, and we own the ones our GPUs run in. Construction has been funded from cash to date, with no debt against these multi-billion dollar assets. As they come online with contracted customers, they can support financing in their own right.
The processes behind the next facilities are continuing, and new paper will cost what the market charges. With GPU paybacks of around two years on our recent 3-year contracts, a wider spread barely moves the economics.
There's more customer demand than we can build for. As we noted at our recent earnings, 2026 is largely sold out, recent 3-year contracts are at more than double the prior year's pricing, and demand for anything we can bring online in 2027 covers it several times over, with prepayments a focus in every negotiation. Conversations on 2028 capacity are already underway.
Meanwhile announced capacity keeps slipping across the industry, which is the point: signing deals isn't the bottleneck in this market, bringing GPUs online is, and that's our focus.
CS Investor retweeted
$IREN: H2 Final Update from IR to Large Share Holder
Today, a group of very large shareholders held a call with IREN’s investor relations to get to the bottom of the H2 rumors.
1. H1 will be billing continuously from August 13th onwards. H1 was delivered according to original contract and specs. Any changes made will not interrupt billing.
2. H2 will be delivered in weeks.
3. H3-H4 will be delivered by late December 2026.
From what I can see, this more or less calms the rumors around H2. H1 revenue will be steady and strong, up ton45 day delay from roughly mid Oct for H2, and H3 minimal delays and H4 by late December. H1-4 all will be handed over to MSFT in 2026.
I was not part of call as these very large holders are mid 8 digits, 9 digits, and mid 9 digits measured in dollar value of IREN shares but I do talk to some of them.
$IREN: H2 Root Cause Analysis Update
I got more information tonight confirming that the issue stems from either MSFT AI model research team not communicating workload requirements to MSFT HPC systems team or that MSFT HPC team incorrectly translated those workload requirements to networking requirements.
MSFT HPC systems team communicates the requirements to IREN and defines the acceptance tests. The miss was both in specs provided to IREN and acceptance test for H1. This is not an error discovered while bringing up the network core to combine H1 and H2.
Yes if IREN had a principal networking engineer with deep knowledge of AI workload requirements, they could have prevented this but it's MSFT's responsibility to give the the full requirements as they own the model and platform layers.
Expectation is that H1 continues billing and new specs are implemented as maintenance over a 4 months. For H2, this is a design change that IREN has to respond to which will incur a 45 day delay. H3 is not most cabled at all so will not be delayed as much and be delivered at the same time as H4. H4, not cabled at all, will incur no delay and be delivered in Dec. H1-4 will all be billing exiting 2026.
For those wondering why cabling can result in a 45 delay and worrying that a 45 day must mean structural changes in liquid cooling or power distribution, you can watch this youtube video to understand how time consuming cabling can be. Credits to @pietrovl on good video pointing out how complex cabling can be. youtube.com/watch?v=_mw0cu1h…. Most likely, IREN is still using MPO since EBO came out just this July and hard to supply chain.
How I Stopped Worrying, And Learned To Love Data Centers zerohedge.com/technology/how…
CS Investor retweeted
🚨Tom Lee says crypto, chip stocks and AI cloud companies are “a coiled spring” if the fundamentals hold.
The Fundstrat co-founder says they have all “pulled back to support levels,” and his strategist Mark Newton thinks markets could bottom “today or on Monday.”
Lee says when fundamentals hold and markets get fearful, “it’s actually a pretty good risk-reward setup.”
What’s your take?
CS Investor retweeted
$ASST could increase it's Bitcoin holdings by 500% this year. 👀 🤯🤑
People are sleeping on this s***.
I hope you're not one of them.
Strive announces upsized IPO of $SATS to $700M notional, priced at $90 per share.
We'll discuss the details in depth on the next @HurdleRatePod, which will be released when the IPO settles next Tuesday.
CS Investor retweeted
🚨 @MorganStanley reiterates @TeraWulfInc as "severely mispriced": Overweight, $65 base-case target vs. $11.54 close on Oct 14 🚨
⚡ Bear case $17.50 (existing contracts only, 12% discount rate), bull case $104.50
⚡ Signed contracts should generate ~$1.5B in annual NOI once complete
⚡ 102 MW energized, with 168 MW coming in Q4 2026, 168 MW in Q1 2027 and 401 MW at Hawesville in 2H 2027 to 1H 2028
⚡ Build costs are under $10/W vs. $11.50 to $14 for peers, with ~$3.0B in cash as of June 30
⚡ Catalysts: a Hawesville credit backstop, Muskie leases, grid timing and a possible Europe project
Morgan Stanley says it is "one of the few" companies that can provide "time to power."
$WULF
CS Investor retweeted
A brutal few days across the AI infrastructure sector, and $WULF has been no exception.
Financing costs, leverage, capital needs and returns on AI investment are all under scrutiny.
We are not sitting on the sidelines.
Yesterday, @MorganStanley hosted us in NYC for a full day with >30 investors, spanning long-only funds, global hedge funds, multi-strategy managers and credit investors. It was one of the most valuable days I've spent with investors.
Tough questions. Candid conversations. Here's what stood out...
CS Investor retweeted
DAN IVES CALLS AI STOCK SELLOFF A CLEAR BUYING OPPORTUNITY
Dan Ives says the sharp declines in CoreWeave ($CRWV ), IREN ($IREN ) and Nebius ($NBIS ) represent buying opportunities rather than warning signs.
Despite rising borrowing costs, Ives argues AI computing demand remains strong, with chip demand reportedly exceeding available supply by 13 to 1.
He expects 800–1,000 data centers to be built in the coming years.
His key message: Higher interest rates make AI infrastructure more expensive to finance, but do not necessarily weaken demand.
CS Investor retweeted
The sense I get from reading big tech Q2 earnings call transcripts is the demand for compute is infinite and the supply is extremely constrained
The only company on the planet that can literally print liquid cooled data centers is $IREN
CS Investor retweeted
$WULF some back of the napkin math on Lake Mariner:
Annual Payments:
$250M Wulf Compute Interest
$300M Principal Pay Down
$25M Parent Convert
Annual Revenue:
$775M
$659M NOI@85%
6% cap rate, $11B enterprise value minus $3B debt = $8B for Lake Mariner alone.
Stock trades at $6B market cap. And you get all of the other projects for free.
