IREN Signs $2.8 Billion in AI Cloud Contracts to Cut Concentration Risk

OpenAI, the AI partner of Microsoft, is reportedly seeking a valuation above US$1.2 trillion in a new funding round. The AI group is forecast to burn roughly US$278 billion in cash as it scales infrastructure and product development with Microsoft support. The prospective deal would reinforce OpenAI's role inside Microsoft's broader AI ecosystem, spanning Azure infrastructure and Copilot branded services. The funding push backs the view that rich AI workloads can keep Azure traffic and Copilot adoption growing, while also sharpening questions about capital intensity and dependency on a few large AI partners.

BNP Paribas sees higher Azure pricing and a possible SpaceX cloud-computing deal as future catalysts that could extend Microsoft's cloud growth. Analyst Stefan Slowinski said Microsoft executives acknowledged Azure pricing is moving higher, but existing contracts will not be rewritten, so the benefit will reset only upon renewal and feather into results gradually rather than create a material step-up in near-term Azure growth. Microsoft has said Azure's recent acceleration into the mid-40% growth range was not driven materially by pricing, with fleet-level efficiency improvements and continued capacity additions the main contributors. Slowinski maintains a Buy rating and $549 price target on Microsoft, and said he would not be surprised by a potential future announcement involving SpaceX, which recently disclosed a new compute customer expected to spend roughly $1 billion per month starting in December. Microsoft declined to confirm any relationship, and also said OpenAI revenue sharing is not currently driving Azure's outperformance.