Author: Heart of Computing Power

On May 8, IREN's stock price surged 16% in early trading after the release of its financial report.

It's not because Bitcoin has gone up in price.

On the contrary, it's because they are dismantling their own mines.

5,800 Bitmain S21 Pro units were removed from the rack and labeled "for sale".

The $140 million impairment charge was clearly stated in the financial statements.

Two years ago, mining machines were still a hot commodity, with demand exceeding 30% in the secondhand market.

Now that it's being sold at scrap metal prices, the capital market is applauding it.

1. 5,800 mining machines were unloaded, and $140 million was written into the impairment loss.

On May 8th, IREN released a set of jarring data.

IREN Limited released its quarterly results ending March 31.

Bitcoin mining revenue was $111.2 million, a year-on-year decline.

AI cloud service revenue was $33.6 million, up year-over-year.

All 5,800 Bitmain S21 Pro main mining machines were delisted and listed as assets for sale, resulting in an asset impairment of $140 million and a discount loss of $2 million.

This impairment loss represents a reduction of nearly 40% compared to the carrying amount in the previous quarter.

In other words, even if these machines were sold at the second-hand market price, the buyers still thought it was too expensive and wanted to get a discount.

The official financial report explicitly states that the remaining mining facilities will be reassessed.

But the financial report also quietly included a $3.4 billion Nvidia contract.

In comparison, the money lost from selling the old mining rigs is less than a fraction of the money from the new contract.

Meanwhile, IREN had zero Bitcoin holdings, and all the coins it mined each day were sold off on the same day.

A Bitcoin mining company dismantled its own mining machines, made provisions for impairment losses amounting to hundreds of millions, and left not a single coin.

On the day the financial report was released, IREN's stock price rose 16% in early trading.

The market rewarded them right after they dismantled their own money-printing machine.

But what if we sell all our old belongings at a bargain price and then the AI ​​orders stop coming in?

II. Filling the gap with 5GW of electricity

The space vacated by the old mining machines has been used non-stop.

Contracts with the giants provided IREN with security.

On May 7, the day before the earnings report was released, IREN officially announced a five-year cooperation agreement with Nvidia, totaling $3.4 billion.

Nvidia also pledged to acquire up to $2.1 billion worth of IREN shares.

The two companies aim to jointly build 5GW of HGX standard AI infrastructure and deploy it globally.

To acquire massive computing power, IREN also made two acquisitions on the same day.

One deal involved Spanish data center developer Nostrum, which secured 490 megawatts of capacity in Europe.

Another deal involved spending $625 million on stock to acquire cloud infrastructure software company Mirantis, completing their software stack.

Within a single day, the hardware was backed by Nvidia, a foothold was established in Europe, and the software capabilities were completed.

Going back further, IREN also holds a five-year, $9.7 billion GPU cloud service deal with Microsoft.

In order to fulfill this order, they had just signed a $3.5 billion GPU procurement agreement with Dell in March.

Combined, Nvidia's contract is worth $3.4 billion and Microsoft's is worth $9.7 billion, totaling $13.1 billion from these two contracts alone.

However, money is spent so easily that it naturally needs to be replenished.

To this end, JPMorgan Chase even took the initiative to lead the way, providing a credit line of $3.6 billion. The reason why capital dared to lend so much money was naturally because Iren had $2.6 billion in cash on its books and launched a $6 billion ATM equity financing plan. In the first quarter alone, it raised $380 million by selling shares.

Furthermore, some of this money came from their mining dumping strategy.

Industry data shows that IREN sells all of its Bitcoin every day without fail, and its cryptocurrency holdings are strictly controlled at an absolute zero.

While frantically dismantling the printing presses, they didn't even leave behind half a Bitcoin.

During the conference call, IREN management set targets of 480 megawatts of AI capacity, 150,000 GPUs online, and $3.7 billion in annual recurring revenue by the end of 2026.

A company that relied on mining machines for its livelihood just twenty months ago is now signing AI contracts worth tens of billions of dollars, holding shares in Nvidia, and aiming for nearly $4 billion in annual revenue.

But if even the miners themselves aren't betting on the future of Bitcoin, then who's really taking the fall in this game?

III. Not just IREN, mining machines are becoming scrap metal.

In fact, Iren was not the only one to take action.

Riot Platforms has undergone a management team overhaul, shifting its strategy toward AI computing power.

MARA Holdings has publicly bet on its AI business line.

Hut 8 secured a government data center contract, and its stock price subsequently rose.

The entire North American Bitcoin mining industry is experiencing the same upheaval: mining machines are depreciating, GPUs are appreciating, and while the infrastructure—electricity and land—remains unchanged, the things running on them have been completely transformed.

The only difference between mining companies' transformation paths is how far they go.

However, most mining companies have chosen to take a two-pronged approach of "mining + AI", maintaining mining machine production capacity while venturing into AI business.

IREN, however, took a different approach: it dismantled 5,800 mining machines, made a $140 million impairment provision, held zero Bitcoin holdings, and simultaneously signed a $13.1 billion AI contract.

They chose to amputate one leg and replace it with a rocket booster, without looking back.

During the earnings call, IREN management stated that the AI ​​computing power market is experiencing "extreme shortages, with virtually no idle GPUs."

This sounds like an industry consensus, but upon closer inspection, it's quite ironic, since that's what Bitcoin mining was said back in the day.

"Computing power is power," "Electricity is the moat," and "Mining machines are money printing machines."

Every statement was once the truth, until it was not.

Computing power is never loyal to any narrative; it only follows the bid with the highest return.