IREN's $2.8B AI Deals Highlight New Funding Model

AI infrastructure companies are increasingly using a new funding model where customers prepay a portion of GPU capital costs upfront, rather than the infrastructure operator bearing all expenses. An AI infrastructure company signed $2.8 billion in new contracts where customers prepaid roughly 45% of associated GPU capital expenditures, reducing the operator's net funding requirements and allowing it to raise its revenue targets. This model matters because demand for AI compute capacity severely outstrips available supply, and customer prepayments allow both cloud operators to finance massive expansions with lower capital requirements and customers to secure guaranteed access to scarce infrastructure. Long-term contracts, averaging about four years, provide predictable revenue that supports the rapid scaling of AI infrastructure capacity.