Microsoft’s (MSFT) nearly $10 billion deal with former bitcoin miner IREN (IREN) for data center capacity underscores how the crypto mining industry’s pivot to artificial intelligence is paying off.

The Australia-based company said Monday that it struck a $9.7 billion deal, making Microsoft its largest customer. Under the five-year agreement, the so-called neocloud operator, which specializes in data centers for AI workloads, will provide Microsoft access to Nvidia (NVDA) chips at its facility in Childress, Texas.

“This deal is really transformational for our business,” IREN chief commercial officer Kent Draper told Yahoo Finance on Monday. “It absolutely catapults us into the kind of top echelon of the neoclouds.”

IREN stock jumped as much as 10% on Monday. Share are up about 580% so far this year.

Separately, IREN also partnered with Dell (DELL) to purchase processors and related equipment for roughly $5.8 billion.

Read more about IREN’s stock moves and today’s market action

The deal underscores an industry pivot as bitcoin miners have evolved into central players in the AI boom, signing long-term contracts to leverage their land, energy, and data centers for artificial intelligence workloads.

Riot (RIOT), TeraWulf (WULF), and Cipher Miner (CIFR) are just a handful of miners that have shifted their resources toward high-performance computing (HPC) infrastructure and AI, sending their stocks soaring nearly 100%, 160%, and 360%, respectively, this year.

“Bitcoin miners are now an integral part of the AI value chain, providing warm powered shells for AI data centers – considered the biggest bottleneck to execution,” Bernstein analyst Gautam Chhugani and his team wrote on Monday morning.

“As we write this, every U.S. listed Bitcoin miner has pivoted towards optimizing value of their power assets over maximizing Bitcoin upside,” Chhugani wrote.

A crowded mining field and bitcoin’s price swings have squeezed profit margins, while bitcoin’s four-year “halving” event, which cuts mining rewards in half, has further eroded revenue over time.

IREN, formally known as Iris Energy, said earlier this year it would stop expanding its bitcoin mining operations to prioritize its AI cloud and data center business.

“We have built very high quality data center facilities historically, that were over equipped for what you would need for bitcoin mining,” said IREN’s Draper. “But we always had an idea that there would be other use cases like AI moving forward.”

Microsoft’s (MSFT) nearly $10 billion deal with former bitcoin miner IREN (IREN) for data center capacity underscores how the crypto mining industry’s pivot to artificial intelligence is paying off.

The Australia-based company said Monday that it struck a $9.7 billion deal, making Microsoft its largest customer. Under the five-year agreement, the so-called neocloud operator, which specializes in data centers for AI workloads, will provide Microsoft access to Nvidia (NVDA) chips at its facility in Childress, Texas.

“This deal is really transformational for our business,” IREN chief commercial officer Kent Draper told Yahoo Finance on Monday. “It absolutely catapults us into the kind of top echelon of the neoclouds.”

IREN stock jumped as much as 10% on Monday. Share are up about 580% so far this year.

Separately, IREN also partnered with Dell (DELL) to purchase processors and related equipment for roughly $5.8 billion.

Read more about IREN’s stock moves and today’s market action

The deal underscores an industry pivot as bitcoin miners have evolved into central players in the AI boom, signing long-term contracts to leverage their land, energy, and data centers for artificial intelligence workloads.

Riot (RIOT), TeraWulf (WULF), and Cipher Miner (CIFR) are just a handful of miners that have shifted their resources toward high-performance computing (HPC) infrastructure and AI, sending their stocks soaring nearly 100%, 160%, and 360%, respectively, this year.

“Bitcoin miners are now an integral part of the AI value chain, providing warm powered shells for AI data centers – considered the biggest bottleneck to execution,” Bernstein analyst Gautam Chhugani and his team wrote on Monday morning.

“As we write this, every U.S. listed Bitcoin miner has pivoted towards optimizing value of their power assets over maximizing Bitcoin upside,” Chhugani wrote.

A crowded mining field and bitcoin’s price swings have squeezed profit margins, while bitcoin’s four-year “halving” event, which cuts mining rewards in half, has further eroded revenue over time.

IREN, formally known as Iris Energy, said earlier this year it would stop expanding its bitcoin mining operations to prioritize its AI cloud and data center business.

“We have built very high quality data center facilities historically, that were over equipped for what you would need for bitcoin mining,” said IREN’s Draper. “But we always had an idea that there would be other use cases like AI moving forward.”