2.1 billion USD investment in IREN, expanding the data center "social circle," NVIDIA continues the "AI cycle"

Ask AI · How does NVIDIA’s AI circular investment tie into computing power supply?

NVIDIA strikes again, continuing its “AI cycle” investments.

On Thursday, May 7th, NVIDIA announced an investment of up to $2.1 billion in data center developer IREN, and simultaneously signed multi-billion-dollar-level agreements for computing deployment, further deepening NVIDIA’s capital layout within the AI ecosystem.

According to the agreement, NVIDIA will be granted a five-year stock purchase option, allowing it to buy up to 30 million shares of IREN. At the same time, IREN announced a $3.4 billion AI cloud computing contract with NVIDIA to purchase and deploy NVIDIA’s Blackwell series processors.

This investment has once again sparked external attention to NVIDIA’s “circular trading” model—NVIDIA continuously invests in companies that buy its own chips, with critics arguing that this essentially reinforces itself and creates a cycle of benefits.

After the announcement, IREN’s stock price rose by 10% in after-hours trading, then the gains narrowed to about 7%, while NVIDIA’s stock price remained almost unchanged.

Iren equity exchange for computing power, binding long-term cooperation

According to a joint statement released Thursday, IREN granted NVIDIA a five-year stock option with an exercise price of $70 per share, allowing the purchase of up to 30 million shares, with an investment cap of $2.1 billion.

In terms of computing power, IREN signed a $3.4 billion AI cloud computing contract with NVIDIA to purchase and deploy NVIDIA’s latest Blackwell processors.

The two parties plan to jointly develop large-scale data centers, with NVIDIA providing hardware equipment, and IREN responsible for land acquisition, power supply, and other infrastructure construction.

The core project of the cooperation is IREN’s Sweetwater park in Texas, currently planned with a capacity of 2 gigawatts.

According to the plan, the park’s computing power will gradually expand to 5 gigawatts over time. As a reference, a single gigawatt of electrical capacity can supply about 750,000 households at any given time.

IREN was founded by Australian brothers Daniel Roberts and Will Roberts. The company was originally named Iris Energy, primarily engaged in Bitcoin mining, and later transitioned to focus on AI computing infrastructure.

This strategic transformation has been fully validated in the capital markets—last year, the company’s stock soared 285%, and since 2026, it has increased by a total of 51%.

Before NVIDIA’s investment, IREN had already accumulated a substantial client base. Last year, Microsoft signed a deal worth approximately $9.7 billion to purchase AI computing power from IREN, becoming one of its major revenue sources.

On the same day as the NVIDIA agreement, IREN also announced the acquisition of Spanish data center developer Ingenostrum SL to support its global expansion goals.

NVIDIA’s “AI cycle”: ecosystem investment accelerates

This is not NVIDIA’s only recent capital move.

Wall Street Insights mentioned that just a day before announcing the IREN deal, NVIDIA purchased warrants for $500 million in Corning, a fiber optic cable manufacturer.

Previously, NVIDIA had also invested in AI developers like OpenAI, as well as chip peers such as Marvell Technology, aiming to promote the expansion of the entire industry ecosystem.

NVIDIA also holds shares in IREN’s competitors, including CoreWeave and Nebius Group NV. Intensive equity investments have sparked criticism, suggesting that NVIDIA’s actions essentially fund companies that buy its own chips, constituting “circular trading.”

In response, NVIDIA CEO Jensen Huang addressed the investment in CoreWeave in January this year. Huang said:

This is just a small part of their overall fundraising needs, and calling it circular—it’s completely absurd.