Data center operator IREN Ltd announced on Tuesday that it has agreed to purchase Nvidia's air-cooled Blackwell systems from Dell for approximately $1.6 billion. This acquisition aims to bring additional computing capacity online to meet the rising demand for artificial intelligence.

In a statement, IREN Ltd explained that this transaction is part of fulfilling a previously announced five-year, $3.4 billion cloud AI services contract with Dell, a manufacturer of AI servers.

The Blackwell systems will be deployed at IREN Ltd's existing data center campus in Childress, Texas, and are expected to be operational by early 2027.

Following the contract's implementation, IREN Ltd's Annual Recurring Revenue (ARR) is projected to increase from $3.7 billion to $4.4 billion. This growth reflects the company's ongoing progress in bringing GPU capacity online.

IREN Ltd stated that the $1.6 billion purchase price covers all equipment and services, including GPUs, servers, storage, networking, ancillary equipment, integration services, and warranties. Payment will be made upon delivery.

Daniel Roberts, Co-CEO of IREN Ltd, commented, "In a market where speed of compute is critical, securing capacity and accelerating commissioning is our top priority."

In a related development, Nvidia announced earlier this month that it would invest up to $2.1 billion in IREN Ltd. This investment is part of a broader agreement between the two companies to deploy up to 5 gigawatts of infrastructure.

Last November, Microsoft entered into a $9.7 billion agreement with IREN Ltd, which included access to Nvidia's advanced chips.