Iren: it’s not just about Bitcoin – artificial intelligence is the new focus
The company processes cryptocurrency transactions and is looking to diversify. The share has very high valuations and remains sensitive to the volatility of the digital asset
Diversification is a well-known strategy in finance, aimed primarily at reducing risk. When it comes to business models, however, it is often used to identify new sources of revenue and, consequently, profitability. This is the case with IREN Limited. The US group, listed on the Nasdaq, has for some time now been working towards a more diversified business structure. What does this involve? To answer this question, we must first consider the group’s corporate purpose.
The company is primarily involved in what is known as ‘bitcoin mining’. This involves operating data centres where specialised hardware (ASICs or GPUs) is used to solve complex cryptographic calculations that validate blocks on the Bitcoin blockchain, in return for a reward in the form of the leading cryptocurrency’s tokens. In particular, in the first half of 2025, the company achieved an installed mining capacity of approximately 50 EH/s (exahashes per second) of computing power, a figure that ranks it amongst the world’s largest public miners. Its reported efficiency is around 15 J/TH, thanks to the use of low-cost electricity from renewable sources and the vertical integration of its infrastructure.
The halving
That said, it must be borne in mind that the mining business is subject to volatility: the price of Bitcoin, regulation, energy costs and competitiveness are all risk factors. But that is not all. A further uncertainty (which encourages diversification) is – according to various experts – the so-called ‘halving’. That is to say: the event scheduled to take place every four years on the Bitcoin network. When it occurs, the reward that miners – including IREN – receive for validating a block is halved. The aim? To limit the number of new tokens entering circulation, thereby keeping the cryptocurrency scarce over time. With fewer bitcoins being produced, the supply grows more slowly. The halving is therefore a mechanism that helps to preserve – through a deflationary effect – the value of the digital asset in the long term. The most recent halving took place on 19 April 2024 and resulted in a reduction from 6.25 to 3.125 bitcoins per validated block. That said, it is clear that, as a side effect, this has an impact on miners’ profitability.
Of course! Blockchain exchange validators optimise operations in order to maintain profit margins. For example, on the infrastructure front, IREN has signed an agreement for a 600 MW grid connection in Texas, bringing its ‘Sweetwater’ hub to a total capacity of 2.75 GW in West Texas. This provides access to low-cost, high-quality energy, in an ideal environment for high-volume, low-cost mining. Furthermore, the group has focused on more efficient machinery which – together with greater economies of scale – aims to keep the unit cost of bitcoin mining down. However, evidently, such measures do not appear to be sufficient for the company.
Diversification
The group is therefore – as mentioned – developing a strategy for greater diversification: alongside traditional mining, a plan has been launched to provide cloud-based artificial intelligence (AI) services, high-performance computing (HPC) infrastructure, GPU clusters and next-generation data centres. The project has already begun to have an impact on the profit and loss account over the last two financial years. According to Bloomberg, in the 2022–2023 financial year, adjusted revenue generated by AI-related cloud computing accounted for 1.6 per cent. In the following financial year, the share of this segment rose to 3.3 per cent. One might say: these percentages are still modest. True! However, on the one hand, the rate of growth is by no means insignificant; and, on the other, one must consider the cost of sales (also adjusted). That relating to the core validation business accounted for 99.17 per cent of the total in 2024, whilst for AI cloud computing it stood at just 0.83 per cent. In the first quarter of 2025–2026, the ‘cost of revenue’ for bitcoin mining stood at 79.9 million, compared with 0.7 million for cloud computing. Put another way: the profit margin that can be expected from the new business is predictably higher than that of traditional validation. It is therefore no surprise that IREN has placed its bets on AI.
