IREN AI cloud expansion hits Europe as mining revenue drops 33%

IREN Limited has completed its acquisition of Ingenostrum, S.L. — better known as Nostrum Group — planting its flag in Spain and adding 490MW of secured, grid-connected power capacity to fuel what the company is calling its IREN AI cloud expansion into Europe. It is the company’s first foothold on the continent, and it arrives at a moment when the math behind Bitcoin mining is looking increasingly uncomfortable.

Key takeaways

• IREN completed its acquisition of Nostrum Group in Spain, adding 490MW of secured power — its first European market entry.
• Over 50 Nostrum employees will continue operating under the IREN brand, bringing local development, engineering, and operations expertise.
• Bitcoin mining revenue fell to $111.2 million from $167.4 million quarter-over-quarter, while AI cloud revenue rose to $33.6 million from $17.3 million.
• IREN holds a five-year, $3.4 billion AI cloud contract with NVIDIA and supports Microsoft’s $9.7 billion cloud deal via its Childress, Texas facility.
• The company targets 480MW of AI cloud capacity and $3.7 billion in annual recurring revenue by the end of 2026.

IREN’s Acquisition of Nostrum Marks Entry into European AI Cloud Market

The deal does more than add megawatts. It hands IREN a local development pipeline, a team of over 50 professionals spanning engineering, construction, and operations, and a ready-made base from which to chase European demand for AI compute capacity. Nostrum’s operations will continue under the IREN brand, giving the Australian-listed company an immediate, credible presence in the Spanish market.

IREN co-founder and Co-CEO Daniel Roberts pointed to renewable power availability and fiber connectivity as key reasons Spain was chosen as the entry point. “Europe is one of the largest and fastest-growing markets for AI infrastructure, and Spain is among its most compelling entry points,” he said.

What the Nostrum deal actually delivers

The 490MW figure is not aspirational — it represents secured, grid-connected capacity already in place. That distinction matters enormously in the AI infrastructure race, where the biggest constraint is not capital or even hardware, but delivered power. Securing that capacity ahead of GPU installation is precisely the kind of move that differentiates a company with a real development pipeline from one that is simply raising money and making announcements.

Nostrum CEO Gabriel Nebreda described the pipeline his team assembled as “one of Spain’s most advanced AI infrastructure pipelines,” and framed the IREN acquisition as the mechanism that lets the group develop it at the speed Europe’s AI demand requires. That speed is not trivial — enterprise AI buyers are signing long-term contracts now, and the window to lock in anchor tenants is competitive.

Why Europe, and why now

European AI infrastructure demand is growing rapidly, driven partly by data sovereignty regulations that push enterprises toward locally-hosted compute. For IREN, entering through Spain with an established local team and a secured power base is a significantly faster path than building from scratch. The acquisition essentially buys years of development work and regulatory navigation in a single transaction.

IREN’s Strategic Shift from Bitcoin Mining to AI Cloud Services

The revenue numbers tell the story plainly. In the quarter ended March 31, Bitcoin mining revenue fell to $111.2 million from $167.4 million in the prior quarter. Over that same period, AI cloud services revenue climbed to $33.6 million from $17.3 million. The trajectory is clear: mining is contracting, AI is growing.

IREN attributed the mining revenue drop to lower average Bitcoin prices and the deliberate removal of mining hardware ahead of GPU installations. That second factor is particularly telling — it means the company is actively choosing to shrink its mining footprint to make room for higher-margin AI workloads. This is not distress; it is a calculated reallocation of infrastructure.

The weight of decommissioned hardware

The financial cost of that transition showed up sharply in IREN’s reported net loss of $247.8 million, driven largely by non-cash impairments tied to decommissioned mining equipment. On paper it looks alarming. In context, it reflects a company writing down sunk costs to clear the path for a different business model — one built around long-term AI compute contracts rather than the daily lottery of Bitcoin block rewards.

Roberts framed the broader dynamic bluntly in IREN’s Q3 update: “The world is structurally short compute, and the bottleneck is delivered data center and GPU capacity.” That observation underpins every strategic decision the company has made over the past year.

IREN’s Major AI Cloud Contracts and Growth Targets

The contracts IREN has already signed give its transition real financial weight. The company holds a five-year, $3.4 billion AI cloud contract with NVIDIA — one of the largest compute supply agreements disclosed by any Bitcoin miner turned AI infrastructure provider. Alongside that, IREN is supporting Microsoft’s $9.7 billion cloud deal through its facility in Childress, Texas, anchoring a significant portion of its near-term capacity to two of the biggest names in enterprise technology.

The targets set for the end of 2026 are equally ambitious: 480MW of AI cloud capacity and $3.7 billion in annual recurring revenue. The Nostrum acquisition in Spain is a direct building block toward that capacity figure, adding European megawatts to what is already being deployed in Texas.

What makes these numbers strategically interesting is the shift from volatile mining income to recurring contract revenue. Annual recurring revenue is the metric the market uses to value SaaS and cloud infrastructure businesses — not crypto miners. IREN is, in effect, asking investors to revalue the company on an entirely different basis.

Broader Industry Trend: Bitcoin Miners Transitioning to AI Infrastructure

IREN is not operating in isolation. Across the sector, miners who spent years building out power capacity, land, and cooling systems are discovering that those same assets are exactly what the AI compute industry needs. The infrastructure overlap is almost perfect.

HIVE Digital is converting a data center in Boden, Sweden into a Tier-3 liquid-cooled high-performance computing facility designed to support 2,000 NVIDIA GPUs across the European Union. Bitdeer has its own conversion pipeline, with its Tydal-2 site in Norway — currently 175MW of online crypto capacity — slated to transition to AI workloads by Q4 2026, alongside conversions planned at Wenatchee, Washington and Knoxville, Tennessee.

The pattern across all three companies reflects the same underlying logic: power, land, and cooling are the hard parts. The hardware can be swapped. What took years to build — the grid connections, the permits, the thermal management systems — transfers directly from mining to AI without rebuilding from the ground up. That existing infrastructure base is now being repriced by the market as AI compute real estate rather than crypto mining capacity.

Public miners are increasingly being valued not just on Bitcoin production metrics, but on their ability to deliver contracted AI compute capacity at scale. IREN’s European move through the Nostrum acquisition is the clearest signal yet that the company is positioning itself as an AI infrastructure provider that once mined Bitcoin — not the other way around. Whether the European pipeline converts into contracted revenue at the pace the 2026 targets require will be the test that defines the next chapter.

FAQ

What is the significance of IREN’s acquisition of Nostrum Group?

It marks IREN’s first expansion into the European market and adds 490MW of secured, grid-connected power capacity in Spain, giving the company a local team and development pipeline to serve growing European demand for AI cloud infrastructure.

Why is IREN shifting from Bitcoin mining to AI cloud services?

Bitcoin mining revenue is declining — dropping to $111.2 million from $167.4 million in one quarter — while AI cloud services revenue is growing, rising to $33.6 million from $17.3 million over the same period. The shift toward AI infrastructure contracts offers steadier, recurring revenue that is less exposed to Bitcoin price volatility.

What major AI cloud contracts does IREN have?

IREN has signed a five-year, $3.4 billion AI cloud contract with NVIDIA and is supporting Microsoft’s $9.7 billion cloud deal through its facility in Childress, Texas. The company is targeting 480MW of AI cloud capacity and $3.7 billion in annual recurring revenue by the end of 2026.

Are other Bitcoin miners also moving into AI infrastructure?

Yes. HIVE Digital is converting a data center in Boden, Sweden to support 2,000 NVIDIA GPUs for high-performance computing across the EU. Bitdeer is planning AI conversions at its Tydal-2 site in Norway, as well as facilities in Washington and Tennessee. The trend reflects miners leveraging existing power, land, and cooling infrastructure to supply AI compute under long-term contracts.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.