The cloud provider has revised its strategy for partnering with smaller data center developers, abandoning several high-risk deals and implementing stricter audits of construction progress. This change in approach follows reporting that Microsoft spent roughly $5B less on planned infrastructure in the third quarter due to delays from “neocloud” providers such as Iren, Nebius, and Nscale. Recent satellite imagery from research firm Aterio highlights missing backup generators at Iren’s Horizon 4 facility in Texas, while generator and fuel-cell permitting delays may push a Nebius project in New Jersey into 2027.
In response to these technical hurdles, Iren is shifting its funding model to have customers absorb more buildout costs to avoid further equity dilution. A new five-year contract at approximately $22M per megawatt now requires the client to prepay 90% of GPU capital expenditures, while a separate short-term deal was signed at $40M per megawatt. Despite these agreements and a $20.3B revenue backlog, Iren reported a $263M net loss for its September quarter, with revenue of $228M and a target for $4B in annualized revenue pushed to early 2027 following a network redesign request from Microsoft.