Good morning. I'm, as George said, Bri Williams from E3 Platforms. I'll let you introduce yourself.
Dan Roberts, co-founder, co-CEO of the NASDAQ-listed IREN.
I love on your bio it says that you bought high and sold low. Tell me a little bit about your background and what that's what's that's what you're talking about.
Oh, that that's referring to Bitcoin. So by way of a bit of a deeper introduction, background in banking, co-founded an infrastructure funds management business in Australia about 15 years ago. Right place, right time. We grew to around 6 billion of assets under management. So ports, airports, wind farms, solar farms, etc. And along the way, I discovered Bitcoin. I think it was 2014. I bought on the run-up to $1,000 and it crashed to 500. And I thought, nonsense, silly magic internet money. Sold it all. How wrong I was. So, yeah, look, Bitcoin, I think it's a really interesting asset. It's commodity, gold 2.0, the rest of the crypto ecosystem. I'll be polite and say maybe varying degrees of respective use cases.
Fair enough. Making a big splash. Obviously, I think everybody probably saw IREN as they walked in the door. It was 7:00 a.m. and it was Led Zeppelin playing and IREN on the main stage as I walked in. One of the things they want us to talk about is the transition of a lot of the Bitcoin and crypto providers moving into the data center and the AI space. We've seen obviously with Crusoe and Hut 8 and Applied Digital and now Riot. You guys have made this transition, but you know, I remember back in, you know, my Digital Realty or NT days when anybody from that space came and wanted to possibly use our facility for colocation, it was too resilient, too redundant, too expensive, and we essentially said go find a warehouse and put a van in it. And you had the foresight to build really, really differently. So why don't you tell me a little bit about that?
Yeah, sure. So as I alluded to earlier, we're not crypto guys. In fact, I really can't stand the word. But back in 2018, my brother and I, Will, who's in the audience, our vision for the future was that we would need high performance computing data centers. So we talk about the industrial revolution, the digitization thematic of humanity. Our seed investor deck, we spoke about movies like The Matrix and Ready Player One. Like as society, we are moving into the cloud and the legacy data center industry is just not built to service that demand. It's, you know, 80% of global data centers are 5 kW or less rack density. We heard Dylan earlier talking about we're up to 200 now. So it's a fundamentally different asset class. They don't belong in metropolitan areas. It makes more sense to go to the source of low-cost excess renewable energy, monetize it at the source and export digital goods at the speed of light over fiber. So for us it was a whole new asset class, these regional high performance computing data centers, and the business plan was simple. Our thesis was that the real world would never keep up with the digital world. There's a fundamental dislocation there where the digital world is your demand driver. It's your revenue line. You've got adoption curves that are going vertical overnight, right? You had Bitcoin that didn't exist 15 years ago. Today it's gold 2.0 at a $2 trillion market cap. You had AI which has been restricted to the hallways of PhDs for many, many decades. And all of a sudden over the last 18 months it's popped out of nowhere to be potentially one of the most society-defining technologies over the coming decades. But the real world can't scale exponentially. The law of large numbers. So for us it was really simple. Use our expertise in infrastructure, data centers, and power, lock up a lot of power and energy, and build a high performance computing data center platform, which we would bootstrap with Bitcoin mining. We don't hold Bitcoin. We mine it. We sell it every day. We're mining at $35,000 a coin. We sell it at 110,000. It's a good business. But as a result, today we're sitting there with 810 megawatt of operating data centers that we're actively swapping out the Bitcoin mining racks and inserting Nvidia GPUs to service AI cloud customers.
You guys have been in the news a lot lately. You've obviously made a very large purchase of those GPUs that are coming in. You've had a bit of a crystal ball already. Where do you see not just IREN going next? And you talked about these can't be in major metropolitan areas. Where do you see as Virginia is full, you guys are in Texas, but we're seeing Texas is filling up. Where do you see things going next?
It's a great question because at the end of the day, that was the opportunity to front-run a lot of these grid connections and we've got 3,000 megawatt of secured grid connected power that we use 100% renewables. We've got a long development pipeline, but undoubtedly it is getting harder to get these grid connected projects. And if you're not grid connected, you've got these issues, right? Because you go behind the meter, all of a sudden your data center destiny is now in the hands of a gas power station. All the operating risk, the financing becomes more expensive. So it's really interesting because arguably we're still in the first innings of this exponential demand equation for power and data centers, but we're seeing all these choke points everywhere.
You have obviously a finance background and we've seen such an incredible insurgence of capital into this industry. We're talking about things in the trillions. It's really a bit hard to sort of wrap your brain around how much capital is coming into the industry, but I love to quote Will Smails, who was on stage with me last year, saying bankers hate change, but this is all change. So how, from the sort of finance perspective, are you looking at this huge growth, huge change, huge change in the technology and how are they underwriting everything that they're looking at and doing and building?
Yeah, I mean the capital markets are forming and in some ways that's the last piece that's required because if there's customers, if there's revenue, if there's a use case for these assets, the capital will flow. And then it comes down to the nature of the capital that does flow and the way that people structure deals. And we were speaking offstage that there's a lot of different structures out there where people are building out the multi-gigawatt campuses, mobilizing tens of billions of dollars of capital in one tranche to try and go quickly, all the way through to smaller levels of GPU financing. And we're fortunate to be listed. We've got good access to capital markets. We've recently secured two tranches of GPU financing which were 100% of the GPU cost, structured as a lease agreement. So the capital's there and again it comes back to have you got the ability to deploy and operate these clouds effectively and have you got the customers to use it.
Speaking of customers, we're seeing it appears that Oracle is now in business with absolutely everyone. They've signed deals with absolutely everyone. But they're not necessarily going to be the end user in all of these cases. They have the credit rating, Microsoft has the credit rating, but they're not necessarily the end user as well. We're seeing much smaller companies that maybe don't have that. And how are you looking at financing when you're not working directly with the hyperscaler or if the hyperscaler is involved in the deal, but they're not necessarily who's writing the check?
Yeah. So, obviously the financing varies for both. I mean both of the tranches we've secured in the last four weeks have not been linked to specific customers and I think that just goes to a growing acceptance and comfort that lenders have in this space that there is a deep pool of users. So yes, we all know that the larger users, there's a cohort of probably half a dozen that dominate a lot of the headlines, but below that, we're seeing a real wave of demand from the smaller levels of AI, you know, researchers, startups, scale-ups, and starting to see that small amount of enterprise there. So the market is becoming deeper and as it gets bigger, we anticipate it getting deeper as well.
You're building something called a NeoCloud. What's a NeoCloud?
Yeah, it's a good word, isn't it? So a NeoCloud is essentially a provider that makes available AI optimized GPU workloads. So over a VPN, people can log in and use a cloud service. And I guess to some extent we are a NeoCloud, but we're probably one of the few if only vertically integrated NeoCloud. So while it is true that we're making available an AI optimized GPU cloud service, we also own everything, we're fully vertically integrated, we own the power connection, we own the land, we own the data centers, we own the cabling, it is end to end and that's a real point of differentiation because a, it allows us to deliver things at a cost level that is superior, we don't have colocation fees for example, our performance is better, there's no latency in terms of services and ticket requests and when there's an issue because you don't have to lodge a ticket with a data center provider. We are the data center provider. So, we've got people on site 24/7. And I think that flexibility, that cost advantage is contributing to the rapid growth that we're seeing. But the final piece of the puzzle is we have 810 megawatt of operating data centers. We are where we are actively going into them, taking out the rack of Bitcoin mining ASICs, putting it to the side and installing Nvidia Blackwells. So the ability to get that flywheel going and service demand in live time is I guess in stark contrast to an industry that is really struggling on the supply side.
Really struggling on the supply side. Absolutely. And supply chain issues all across the industry and everything and supply chain and people. So talk to me a little bit about how you're approaching the talent and hiring people and bringing new people into the industry.
