IREN's Bold Moves in Sustainable Bitcoin Mining & AI Data Centers

Since publishing my initial thesis on Iris Energy, the company has exceeded expectations across all key dimensions. As a result, I am raising my fair value estimate from $16 to $26 per share, reflecting stronger conviction in the company’s emerging AI infrastructure business and its scalable data center blueprint.

Process power and execution

IREN has grown from 1.1 EH/s in Q3 FY2022 to 50 EH/s as of July 2025, hitting its mid-year target. Over the same period, it has cut its energy usage per terahash from 29.5 to below 15 joules. This combination of rapid scale and improved efficiency is rare in any sector. The driver is IREN’s vertically integrated approach, which gives it full control over design, fabrication, construction and operations. Management has consistently delivered sites ahead of schedule and above spec, most notably Canal Flats and Childress, now operating at 810 MW across the platform.

Their ability to execute at this level is not just technical. It’s operationally institutionalised. The company continues to reduce “other costs” as a percentage of revenue, demonstrating operating leverage even through aggressive expansion. Its modular blueprint has now been proven across sites and regions.

AI cloud strategy: from optionality to core

The biggest update is my shift from cautious optimism to full conviction in IREN’s AI cloud strategy.

In early 2024, IREN had just 248 Nvidia H100 GPUs. By Q3 FY2025, that number had grown to 1,896. And now, IREN has announced the purchase of ~2,400 next-generation Nvidia Blackwell GPUs (B200/B300), bringing its total GPU fleet to approximately 4,300 units. These GPUs are being deployed at the Prince George data center and were fully funded from cash reserves.

The Blackwell architecture supports next-generation training and inference at scale, and IREN expects strong risk-adjusted returns from this deployment. With liquid-cooled infrastructure, ultra-dense racks, and already-operating sites like Sweetwater and Childress, IREN has the physical and engineering foundation to capitalise on the coming wave of AI workloads.

To support the capital strategy behind these investments, IREN has also appointed Anthony Lewis as Chief Capital Officer. With over 22 years at Macquarie Group, most recently as Co-Treasurer, he brings deep expertise in structuring and scaling capital frameworks for infrastructure businesses. This is a timely and strategic move as IREN evaluates additional opportunities in AI data center buildouts.

Industry-leading efficiency

IREN’s operational efficiency remains best-in-class.

Image credit: Power Mining Analysis https://www.powermininganalysis.com/monthly-miner-metrics

IREN mines more BTC per unit of hash rate than nearly all its peers, despite operating at scale. It also benefits from some of the lowest power costs in the sector, averaging $0.03/kWh at its Texas sites, down from $0.05/kWh in British Columbia.

Unlike many competitors who accumulate BTC on their balance sheets, IREN sells mined Bitcoin to reinvest in infrastructure and growth. This has created a reinvestment flywheel, turning low-cost energy into compute capacity across both mining and AI verticals.

Valuation update

My previous DCF model valued IREN at $16 per share, based largely on its Bitcoin mining operations. I have now revised this to $26 per share to reflect:

• Increased confidence in the scale and monetisation potential of IREN’s AI and high-performance computing vertical
• Demonstrated ability to compound infrastructure deployment and operating leverage
• Expanded long-term TAM from crypto into enterprise compute

IREN’s cash flows remain negative due to rapid investment, but the quality of execution, repeatability of its blueprint, and scale of secured energy capacity (2.9 GW) create meaningful long-term optionality.

Updated investment case

IREN is evolving from a Bitcoin miner into a differentiated infrastructure provider. It is exposed to the two most powerful compute trends of this era: decentralised crypto and centralised AI. If either of these trends plays out, IREN could benefit. If both do, it becomes a highly asymmetric opportunity.

At a market cap of around $3.4 billion, with world-class efficiency and one of the largest secured power footprints in the industry, IREN offers a compelling long-term setup.