$2.1 billion investment in IREN, expanding the data center "circle of friends," NVIDIA continues the "AI loop"

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Nvidia strikes again, continuing its "AI loop" investment.

On Thursday, May 7, Nvidia announced an investment of up to $2.1 billion in data center developer IREN. Both parties also signed a multi-billion-dollar computing power deployment cooperation agreement, further deepening Nvidia’s capital layout in the AI ecosystem.

According to the agreement, Nvidia will be granted a five-year stock option, allowing it to purchase up to 30 million shares of IREN. Meanwhile, IREN announced a $3.4 billion AI cloud computing contract with Nvidia, to procure and deploy Nvidia's Blackwell series processors.

This investment has once again drawn attention to Nvidia’s “loop transaction” model—Nvidia continuously takes stakes in companies that buy its chips, with critics arguing that this is essentially self-reinforcing and constitutes an interest loop.

After the announcement, IREN’s stock price once rose by 10% after hours, then narrowed to about 7%, while Nvidia’s stock price remained almost unchanged.

IREN swaps equity for computing power, binding long-term cooperation

According to a joint statement released by both sides on Thursday, IREN grants Nvidia a five-year stock option with an exercise price of $70 per share, for up to 30 million shares, corresponding to a maximum investment of $2.1 billion.

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

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

The core project of the cooperation is IREN’s Sweetwater campus in Texas, with a current planned capacity of 2 GW.

According to the plan, the campus's computing power will gradually expand to 5 GW over time. As a reference, a single gigawatt of power capacity can provide for about 750,000 households at any given time.

IREN was founded by Australian brothers Daniel Roberts and Will Roberts, originally under the name Iris Energy, initially focusing on Bitcoin mining before transforming to focus on AI computing infrastructure.

This strategic transformation has been fully validated by the capital market—the company’s share price soared 285% last year and has risen another 51% so far in 2026.

Before Nvidia’s investment, IREN had already accumulated a considerable number of large clients. Microsoft signed an agreement worth about $9.7 billion last year to purchase AI computing power from IREN, becoming one of its important sources of revenue.

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

Nvidia's "AI Loop": Ecosystem Investment Accelerates

This is not the only recent capital move by Nvidia.

According to Wallstreetcn, just a day before announcing the IREN deal, Nvidia acquired a $500 million subscription option for shares in fiber optic cable manufacturer Corning.

Previously, Nvidia has also taken stakes in AI developers such as OpenAI and chip peers such as Marvell Technology, intending to promote the expansion of the entire industry ecosystem.

Nvidia also holds shares in IREN’s competitors, including CoreWeave and Nebius Group NV. Dense equity investments have drawn criticism, with observers arguing that Nvidia is essentially funding companies that buy its chips, constituting "loop transactions."

In response, Nvidia CEO Jensen Huang commented on the CoreWeave investment earlier this January. Huang stated:

This is only a small part of the total amount of funds they ultimately need to raise; to call this a loop—that is completely absurd.

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