Key points
- Users call two IREN sites in Canada the industry's worst, SemiAnalysis says
- The firm says IREN's Texas builds look much better
- Nvidia's IREN share right carries a $70 exercise price
IREN Ltd (IREN) fell 6.3% on October 7, deepening an earlier decline after research firm SemiAnalysis published criticism of its data centers in Prince George and Mackenzie, British Columbia. Other AI cloud stocks also fell.
In a three-part post on X, SemiAnalysis said it had heard about "multi-day power outages, network upgrades, storage failures, air quality controls leading to link flaps, XIDs everywhere." Link flaps are network connections that repeatedly drop and reconnect, and XIDs are error reports from Nvidia's GPU drivers. SemiAnalysis called it "The #1 worst site in the industry, according to users."
The firm said it has tested IREN GPUs rented through resellers. Many of the unhappy users it hears from rent directly from IREN, it said.
The Texas builds get better marks
SemiAnalysis said IREN's new builds in Childress and Sweetwater, Texas, look much better. It said they aren't N+0, meaning they have backup capacity for power, cooling, and internet providers.
The Texas campuses are also far larger. IREN's annual report lists gross power capacity of 750MW at Childress and 1,400MW at Sweetwater 1, including capacity still under development. It lists 50MW at Prince George and 80MW at Mackenzie.
SemiAnalysis disputes the managed-services claim
In its final post, SemiAnalysis urged IREN to "stop falsely claiming to offer managed clusters" in investor materials. The same annual report says IREN delivers "both bare metal compute and managed cloud services." SemiAnalysis quoted IREN chief commercial officer Kent Draper as saying, "we don't have any live managed services today."
An X post traced Draper’s comment to a September 24 interview on McNallie Money, which the video says was conducted on IREN’s behalf. SemiAnalysis presented the remark as contradicting the annual report. We couldn’t confirm its full context.
SemiAnalysis urged IREN to focus on bare-metal services, where customers rent servers and run their own software, saying demand remains strong. The firm already rates IREN as underperforming in its ClusterMAX rankings of GPU cloud providers.
Nvidia's $70 exercise price is well above IREN's stock price
SemiAnalysis said it expects "the $2.1B investment from NVIDIA" to help IREN "cut fewer corners this time around." That $2.1 billion is what Nvidia would pay if it exercised the full right, not money already invested. In May, IREN gave Nvidia (NVDA) the right to buy up to 30 million shares at $70 each over five years, vesting as Nvidia delivers GPUs, according to the annual report. The deal is part of the Nvidia partnership that also includes a cloud contract at Childress.
IREN closed near $38.70, about 45% below that $70 price. The stock was already down about 4% when SemiAnalysis posted at 11 a.m. ET and fell most sharply in the half hour that followed. Nebius (NBIS) fell 5.1% and CoreWeave (CRWV) fell 3.5%.
IREN reported in August that AI cloud revenue had passed bitcoin mining revenue for the first time in the June quarter. What I'd want to know next is how much of that revenue still runs through Prince George and Mackenzie.
