IREN Closes $3B Convertible Notes Offering to Fund AI Cloud Expansion After Nvidia, Microsoft Deals

$3 billion convertible notes deal closes

IREN has completed a $3 billion financing through the issuance of 1.00% convertible senior notes due 2033, reinforcing its capital base as it scales its AI-focused cloud business.

The transaction consisted of a $2.6 billion base offering and a $400 million option that was fully exercised. IREN said the offering generated approximately $2.96 billion in net proceeds after deducting fees and expenses.

The notes carry a 1.00% coupon and mature in 2033. IREN also disclosed that the securities were sold in a private placement to qualified institutional buyers under Rule 144A.

Proceeds allocated to capped calls and corporate funding

IREN plans to allocate $201.3 million of the net proceeds to fund capped call transactions. The remaining capital is expected to be used for general corporate purposes and working capital, according to the company.

The capped call arrangements are linked to the convertible notes and are intended to reduce potential dilution if the notes are later converted into equity. IREN said the capped call cap price begins at $110.30 per share, which it described as 100% above the $55.15 share price recorded on May 11.

IREN added that the notes include a 32.5% conversion premium. The company also said there is no investor put option, except in certain standard change-of-control scenarios.

Financing follows major AI cloud agreements

The capital raise comes shortly after IREN announced a five-year $3.4 billion AI cloud agreement with Nvidia. Earlier reports also indicated that Nvidia received a five-year warrant to purchase up to 30 million IREN shares at $70 each.

That announcement followed IREN’s previously disclosed $9.7 billion deal with Microsoft focused on GPU cloud infrastructure. Market updates cited by the company indicated that these partnerships lifted IREN’s committed revenue to more than $15 billion, supporting its stated strategy to expand large-scale AI data center capacity.

Company continues pivot from Bitcoin mining toward “Neocloud”

IREN, formerly known as Iris Energy, began as a Bitcoin mining operator but has increasingly repositioned its business toward what it calls a “Neocloud” model. Under this approach, IREN aims to leverage its energy and data center footprint to deliver compute for AI workloads.

The company has described its AI cloud platform as centered on large-scale data centers and GPU clusters designed for AI training and inference. It has also said its sites are supported by grid-connected land and power assets across North America, Europe, and APAC.

Earlier reporting noted that as IREN moved deeper into GPU-intensive infrastructure, investors had already been focused on funding risk tied to the capital demands of scaling AI cloud services. The newly closed convertible notes offering increases IREN’s cash resources as it continues that buildout.

Forward-looking caution on the use of funds

In its disclosure, IREN cautioned that its plans for deploying the proceeds are forward-looking. The company said it cannot provide assurances regarding how effectively it will use the funds after completing the capped call transactions.