IREN‘s 800MW data center campus in Bundey, South Australia sits at the center of a fundamental re-rating thesis: a former Bitcoin miner converting scarce, grid-connected real estate into contracted AI infrastructure revenue, backed by Microsoft and investment-grade credit markets.
| Metric | Detail |
|---|---|
| Bundey campus capacity | 800MW, energization target 2028 |
| GPU financing facility | $3.65B, rated A/A(low) by Fitch/DBRS |
| Blended all-in GPU capex cost | 3.31% (after Microsoft prepayments) |
| Convertible notes | $3.0B, 1.00% coupon, due Dec 2033 |
| AI Cloud revenue growth (Q3 2026) | $7M to $17M, +142% QoQ |
| Short interest decline | 58.36M to 50.94M shares |
IREN 800MW Data Center: The Power Moat in Numbers
The Bundey agreement, announced June 3, secures four 330kV feeder exits directly from the local utility substation. That eliminates the need for costly network upgrades and locks in the full 800MW capacity from day one. Location matters here too: Bundey sits near major submarine fiber routes connecting Singapore and Japan, and South Australia is targeting 100% net renewable energy by 2027.
The campus is projected to create more than 500 construction jobs and over 200 ongoing skilled roles. That scale drew a direct endorsement from South Australia Premier Peter Malinauskas, who cited the project’s potential to strengthen the state’s position as a technology hub for the Asia-Pacific region.
For hyperscalers, the appeal is simple. Permitted, grid-connected capacity in a geopolitically stable jurisdiction close to Asia-Pacific demand is scarce. IREN is selling access to exactly that.
The $3.65B Facility: A Market First, Not Just a Big Number
The $3.65 billion GPU financing, closed June 1, carries a specific distinction: it is described as both the highest publicly rated investment-grade GPU financing ever announced and the first GPU financing executed in the U.S. private placement market. Credit markets are not just tolerating the deal; they are setting precedent with it.
The structure breaks into two tranches. A $2.10 billion U.S. private placement priced at a fixed rate equivalent to SOFR+2.13%, and a $1.55 billion delayed draw term loan at a floating rate of SOFR+2.25%, with interest rate hedges in place on the latter. Fitch and DBRS rate the facility A and A(low), respectively, anchored by Microsoft’s offtake agreement.
Together with Microsoft customer prepayments, the facility covers approximately $5.59 billion of the $5.81 billion in GPU capex under the contract, roughly 96%. The blended all-in cost drops to 3.31% once those zero-interest prepayments are factored in, against a headline debt cost of 6.0%. The financing is designed to support expansion to 480MW of AI Cloud capacity by the end of 2026.
Convertible Notes Add Long Runway, Capped Call Limits Dilution
Separate from the GPU facility, IREN raised $3.0 billion through convertible notes carrying a 1.00% coupon and maturing December 1, 2033. Net proceeds came to approximately $2.96 billion, with $201.3 million directed to capped call transactions. The initial conversion price sits at roughly $73.07 per share (13.6848 shares per $1,000 principal).
The capped calls set an upper strike of $110.30 per share, double the reference price of $55.15 when the notes priced in mid-May. The calls are cash-settled, which limits equity dilution for existing shareholders if the stock runs toward conversion territory.
AI Cloud Revenue and Short Capitulation
The re-rating case leans on operating data, not just financing optics. AI Cloud Services revenue rose 142% quarter-over-quarter in Q3 2026, from $7 million to $17 million. That growth runs against a headline earnings miss driven by legacy mining, which is the exact pattern you expect from a business mid-transition.
IREN targets $4.4 billion in annualized run-rate revenue, though the company acknowledges that figure depends on GPU delivery, commissioning timelines, utilization, and pricing assumptions. Not fully de-risked.
Short sellers are adjusting. Open short interest fell from 58.36 million shares to 50.94 million, nearly 7.5 million shares covered. Institutional filings show accumulation, with AI infrastructure cited as the rationale. The IREN 800MW data center pipeline is what converted the skeptics.
The near-term binary is the 480MW capacity milestone at year-end 2026. Hit it on schedule, and the $82.62 consensus price target looks achievable. Miss it, and the re-rating story stalls while the $73.07 conversion price becomes the floor to watch.
