IREN Stock Climbs After It Borrows Against Its GPU Fleet To Fund AI Expansion

• IREN raised $363 million on Wednesday by refinancing GPU servers and networking gear it recently brought from its AI computing business.
• The deal returns a large share of the equipment's original cost to IREN as cash, backed by the equipment and multi-year customer contracts.
• The financing will support IREN's push into AI cloud services, the company said, a move that requires heavy spending on GPUs.

IREN Limited (IREN) shares edged higher on Wednesday morning after the company announced it had raised $363 million by refinancing recently purchased AI computing equipment, providing fresh cash to fuel its expansion.

Wingspire Equipment Finance said that it has signed an agreement for Graphics processing unit (GPU)-based servers and networking systems that IREN already runs in high-density data centers. That equipment is already making money. 

Read Next

Meta, Snap Reportedly Face New US Trial Over Youth Social Media Addiction Claims — Zuckerberg, Spiegel Expected To Testify

Harshita Tyagi

Turning Hardware Into Cash

The financing returns a big chunk of what IREN initially paid for the equipment, the companies said. That transforms the cash tied up in the hardware into cash IREN can reinvest in growth. 

The loan is secured primarily by the equipment and backed by multi-year contracts with IREN's customers, the company said. The deal was financed by a syndicate of six lenders, anchored by large commitments from Eldridge Capital Management and Silver Point Capital. Earlier in the month, IREN’s co-CEO Daniel Roberts said lenders fund most GPU purchases with the GPU as collateral, which is exactly how this deal is set up.

What The Lenders Said

"IREN was looking to unlock capital from deployed AI infrastructure while preserving flexibility around its customer relationships," said Dylan Potter, vice president of business development at Wingspire. He said the lender delivered a "tailored, asset-backed solution" that matched IREN's operating model.

Harrison Smith, a managing director at Eldridge, said the facility "will support IREN's sustained trajectory of expansion as it scales to meet future customer demand." Eldridge provided an "anchor commitment," he said, adding that the firm backs "infrastructure that will define the future of AI compute."

IREN stock was up 0.17% in the morning trade. On Stocktwits, retail sentiment around IREN remained in the ‘bullish’ zone, accompanied by ‘high’ chatter levels over the past day. 

The Lender Behind The Deal

Wingspire Equipment Finance is the equipment finance business of Wingspire Capital, a portfolio company of Blue Owl Capital Corporation (OBDC). Blue Owl Capital Inc. (OWL) is an alternative asset manager with $319 billion in assets under management, and its affiliate manages OBDC.

IREN, a long-time Bitcoin (BTC) miner, has been expanding into renting out computing power for AI. IREN’s shares fell over 27% so far this year. 

Read also: Galaxy Digital Stock Extends Post-Earnings Rally Even As Analysts Trim Price Targets

For updates and corrections, email newsroom[at]stocktwits[dot]com.