Microsoft's $9.7 billion deal with IREN shows bitcoin miners' AI pivot is paying off

Group 1: Core Insights - Microsoft's $9.7 billion deal with IREN highlights the successful transition of the crypto mining industry towards artificial intelligence, with IREN becoming Microsoft's largest customer under a five-year agreement [1][7] - IREN's stock surged by 10% on the announcement and has increased approximately 580% year-to-date [2] - IREN has also partnered with Dell Technologies for a $5.8 billion deal to acquire processors and equipment, further emphasizing the industry's shift towards AI [3] Group 2: Industry Trends - Other bitcoin miners like Riot, TeraWulf, and Cipher Miner have also redirected their resources towards high-performance computing and AI, with stock increases of nearly 100%, 160%, and 360% respectively this year [4] - Analysts note that bitcoin miners are now essential to the AI value chain, providing necessary infrastructure for AI data centers, which are currently facing execution bottlenecks [4] - The competitive landscape for bitcoin mining has changed, with miners focusing on optimizing power asset value rather than maximizing bitcoin profits due to market pressures and diminishing returns from mining [5] Group 3: Company Strategy - IREN, formerly known as Iris Energy, has decided to halt its bitcoin mining expansion to focus on its AI cloud and data center business [6] - Bernstein analysts maintain a Buy rating on IREN with a price target of $75, suggesting potential for further growth as the company scales its AI operations [6]