Author: Heart of Computing Power

On May 8th, when IREN's financial report was released, the stock price surged 16% in the morning.

Not because Bitcoin had risen.

On the contrary, it was because they were dismantling their own mining facilities.

5800 Bitmain S21 Pro mining machines were unloaded from the racks and labeled "for sale".

A $140 million impairment was written in black and white in the financial report.

Two years ago, mining machines were a hard currency, and the second-hand market was willing to pay a 30% premium.

Now they are sold at scrap metal prices, and the capital market actually applauded.

1. 5800 mining machines dismantled, $140 million written down

On May 8th, IREN released a set of glaring data.

IREN Limited announced its quarterly results for the period ending March 31.

Bitcoin mining revenue was $111.2 million, a year-on-year decline.

AI cloud service revenue was $33.6 million, a year-on-year increase.

All 5800 main mining machines, Bitmain S21 Pro, were removed from shelves, listed as assets for sale, resulting in a $140 million asset impairment and a $2 million discount loss.

Compared to the book value of the previous quarter, this impairment wrote off nearly 40%.

In other words, if these machines were sold at second-hand market prices, buyers would still think they were expensive and would need further discounts.

The official financial report explicitly stated that the remaining mining facilities would be reassessed.

However, the financial report also quietly included a $3.4 billion contract with NVIDIA.

In comparison, the loss from selling the old mining machines didn't even cover the small amount of the new contract.

At the same time, IREN had a zero Bitcoin position, selling all the coins mined the same day.

A Bitcoin mining company dismantles its own mining machines, records a billion-level impairment, and doesn't retain a single coin.

Yet on the day the financial report was released, IREN's stock price rose 16% in the morning.

They just dismantled their own money printer, and the market rewarded them.

But if they sell all their old assets at a loss, what happens if AI orders dry up?

2. Filling the gap with 5GW of power

The space left by the old mining machines was not idle for even a minute.

Contracts with giants provided assurance for IREN.

On May 7th, the day before the financial report was released, IREN announced a five-year cooperation agreement with NVIDIA, with a total amount of $3.4 billion.

NVIDIA also committed to subscribing to IREN's equity for up to $2.1 billion.

The goal of both companies is to jointly build 5GW of HGX standard AI infrastructure and deploy it globally.

To support massive computing power, on the same day, IREN made two acquisitions.

One was Spanish data center developer Nostrum, acquiring 490 megawatts of European capacity.

The other spent $625 million in stock to buy cloud infrastructure software company Mirantis, completing their software stack.

In one day, IREN secured NVIDIA's endorsement for hardware, established a foothold in Europe, and filled in software capabilities.

Looking back further, IREN still held a five-year $9.7 billion GPU cloud service contract signed with Microsoft.

To deliver this order, in March they had just signed a $3.5 billion GPU procurement agreement with Dell.

Together, NVIDIA's $3.4 billion and Microsoft's $9.7 billion, just these two contracts amount to $13.1 billion.

However, spending big money naturally requires replenishment.

For this, JPMorgan even took the lead in providing a $3.6 billion credit line, and the capital is willing to lend because IREN is sitting on $2.6 billion in cash, while initiating a $6 billion ATM equity financing plan, raising $380 million just by selling stocks in the first quarter.

Moreover, part of this money came from their mining sell-off strategy.

Industry data shows that IREN sells all mined Bitcoin daily, strictly controlling their cryptocurrency holdings to an absolute zero.

While madly dismantling their money printers, they don’t even keep half a Bitcoin.

IREN's management set a target during the earnings call: by the end of 2026, they aim for 480 megawatts of AI capacity, 150,000 GPUs online, and $3.7 billion in annual recurring revenue.

A company that relied on mining machines for its livelihood just twenty months ago is now signing AI contracts worth billions, binding NVIDIA shares, and sprinting toward an almost $4 billion annual revenue target.

But if even miners themselves don't bet on Bitcoin's future, then who exactly is picking up this game?

3. Not just IREN, mining machines are turning into scrap metal

In fact, IREN is not the only one taking action.

The Riot Platforms executive team has undergone a shakeup, shifting strategy towards AI computing power.

MARA Holdings publicly bets on an AI business line.

Hut 8 secured a government data center contract, and its stock price rose accordingly.

The entire North American Bitcoin mining industry is experiencing the same rupture; mining machines are depreciating, GPUs are appreciating, the infrastructure of electricity and land remains unchanged, but what runs on it has completely changed.

Currently, the paths to transformation for mining companies only differ in how far they go.

However, most mining companies chose to walk on "mining + AI" with both legs, retaining mining machine capacity while trying out AI business.

Conversely, IREN chose a different direction, dismantling 5800 mining machines, writing down $140 million, holding zero Bitcoin, while signing $13.1 billion in AI contracts.

They opted to cut off one leg entirely, replacing it with a rocket booster, and not looking back.

IREN's management mentioned during the financial call that the AI computing power market is "extremely short on supply, with almost no idle GPUs."

This sounds like industry consensus, but it’s quite ironic, considering Bitcoin mining was once said the same.

"Computing power is power," "Electricity is the moat," "Mining machines are money printers."

Each of these was once a truth, until they weren't.

Computing power has never been loyal to any narrative; it only follows the highest bidder.

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