IREN, a data center company.
illustration by Cheng Xin/Getty Images
IREN says a request from Microsoft delayed its massive Texas data center project.
IREN shares plunged Thursday before rebounding in after-hours trading.
The delayed project adds to growing concerns about the Nvidia-backed neocloud industry.
The Nvidia-backed cloud provider IREN said Thursday that a Microsoft-requested change to networking equipment resulted in delays to a massive data center project in Childress, Texas.
IREN said it now expects to reach $4 billion in operating annual recurring revenue by January or February, having previously targeted year-end.
The project comprises four phases, and IREN is building it under a $9.7 billion contract with Microsoft. After the first building was delivered in August, Microsoft requested relatively inexpensive changes to help support the latest AI models, IREN co-CEO Daniel Roberts said Thursday on an earnings call.
“The data centers are practically done, and we’re waiting for remaining equipment to arrive to finish commissioning,” he said.
He said that IREN and Microsoft have a “great relationship.”
Microsoft said last week that it spent $5 billion less than expected on AI infrastructure due to delays from third-party cloud providers. While it didn’t name names, satellite images analyzed by research firm Aterio pointed to IREN and Nebius .
The delay underscores growing concerns about neoclouds, which rent AI compute to businesses and have been facing power shortages and construction setbacks.
Roberts said IREN is slowing expansion plans because of tougher financing conditions, though customer demand remains strong.
IREN shares plunged Thursday and rebounded in after-hours trading following its earnings report. The company reported $228 million in quarterly revenue and a net loss of $263 million.
Neoclouds like IREN are a key part of Nvidia’s customer base, and Nvidia has supported many of them through investments and financial guarantees.
They give Nvidia access to a broader pool of customers beyond cloud giants like Google, Amazon, and Microsoft, which buy Nvidia’s chips and are also developing rival hardware of their own.
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