This week, Hut 8 Corp. (NASDAQ: HUT) announced a substantial expansion of its AI data center operations, securing a second 15-year lease valued at $9.8 billion for its Beacon Point campus in Texas. Simultaneously, IREN Limited (NASDAQ: IREN) revealed new multi-year AI cloud contracts totaling $2.8 billion, significantly boosting its revenue targets. These developments have sparked a notable rebound in AI compute stocks, underscoring the escalating demand for high-performance computing infrastructure.

Hut 8's Beacon Point Commercialization

Hut 8's latest agreement involves an existing, unnamed investment-grade tenant, doubling their contracted IT capacity at the Beacon Point campus to 704 megawatts (MW). This transaction fully commercializes the 1-gigawatt (GW) Beacon Point site in Nueces County, Texas, bringing the campus-level base-term contract value to an impressive $19.6 billion. With renewal options, the potential contract value for the campus could reach up to $50.2 billion.

Across its entire AI data center portfolio, Hut 8 now boasts a total contracted IT capacity of 949 MW, supported by 1,330 MW of utility capacity. The aggregate base-term contract value for this portfolio stands at $26.6 billion, with an expected average annual net operating income (NOI) exceeding $1.75 billion. The company plans for initial energization of the site in the first quarter of 2027, with the delivery of the first Phase 2 data halls anticipated by the second quarter of 2028.

IREN's Expanding AI Cloud Footprint

IREN Limited's new multi-year AI cloud contracts, valued at $2.8 billion, are with leading AI developers, further diversifying its customer base which now includes major players like Microsoft and NVIDIA. Following these agreements, IREN has raised its year-end 2026 AI Cloud annualized run-rate revenue (ARR) target from $3.7 billion to over $4 billion, with approximately 85% of this target now under contract.

A key aspect of IREN's recent contracts is the inclusion of customer prepayments, which cover roughly 45% of the associated GPU capital expenditure, thereby reducing IREN's net funding requirements for these deployments. The company is aggressively expanding its AI cloud capacity, targeting approximately 480 MW by the end of 2026, with ambitious plans to reach 1.2 GW during 2027.

Industry Shift and DePIN Context

Both Hut 8 and IREN, originally significant players in the cryptocurrency mining sector, have strategically pivoted towards providing high-performance computing infrastructure for artificial intelligence. This transition leverages their expertise in managing large-scale energy assets and data center operations, repositioning them as critical providers in the burgeoning AI compute market. This shift aligns with the DePIN (Decentralized Physical Infrastructure Networks) narrative, where physical infrastructure, such as data centers and compute capacity, is built out and utilized to support decentralized applications and services, including AI workloads. The ability to monetize existing energy infrastructure for new, high-demand use cases demonstrates a significant evolution within the digital asset ecosystem.

What to Watch

The substantial contracts secured by Hut 8 and IREN highlight a robust and growing demand for AI compute infrastructure, suggesting continued expansion for companies capable of delivering at scale. Investors will be closely watching the execution of these large-scale projects, particularly Hut 8's progress towards energizing its Beacon Point campus and IREN's ability to meet its ambitious capacity expansion targets. The trend of former crypto miners leveraging their infrastructure for AI services is likely to continue, potentially attracting more capital and innovation into the DePIN sector as the demand for AI processing power intensifies.

Original announcement: Hut 8