Nvidia’s investment playbook is drawing scrutiny and pushing its stock higher at the same time. Shares climbed 1.2% in premarket trading Friday after the chipmaker announced an AI infrastructure partnership with IREN. Critics call the deal circular. Analysts call it smart.
The agreement puts five gigawatts of AI infrastructure across IREN’s data centers. Nvidia gets a five-year option to buy 30 million IREN shares at $70 each, worth up to $2.1 billion. IREN gets a five-year cloud services deal valued at roughly $3.4 billion in revenue.
The structure is not new for Nvidia. It has struck similar arrangements with Corning, Marvell Technology, Lumentum, Coherent, CoreWeave, Nebius, Synopsys, and Nokia. The pattern raises a fair question: is Nvidia financing its own demand?
J.P. Morgan’s U.S. equity strategist and head of Thematic Research does not think so. He argues the model reflects genuine market demand and mirrors supply chain financing that industrial companies have used for decades. The real goal, he says, is to spread Nvidia’s customer base and lock in demand for future GPU generations.
IREN started out as an Australian Bitcoin miner called Iris Energy. It has since pivoted to AI cloud infrastructure, building and running data centers powered by renewable energy. Its shares jumped 11% in premarket trading Friday, even though third-quarter revenue missed analyst expectations. The Nvidia deal was simply a bigger story.
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