A neocloud borrows against two things: the GPUs it buys and the contract of the customer who rents them. IREN’s filings show what happens to the rate when that customer is Microsoft. IREN said its $3.65 billion facility of June was “Anchored by Microsoft’s offtake” and cost a blended 6.00%; its August financing for GPUs at its Mackenzie site, which serves other customers, carries a fixed 9.0%, its annual report says.
On the $3.65 billion facility, that 3.0-point gap is about $110 million a year of interest, by our arithmetic; the two loans differ in date, site and structure, so this is an illustration, not a saving. As we read the filings, the same contracts also tie each company to a large tenant, to power and permit timelines, to delivery dates and, for the rest of its debt, to the bond market.
Business Pill · Take-or-Pay
An evergreen Business Engineer explainer on take-or-pay contracts. It teaches the general idea only and does not discuss any neocloud, lender or tenant named here.
The key insight: In the filings we read, the rate on neocloud debt differs with who stands behind the payments: IREN’s Microsoft-anchored facility cost a blended 6.00% and its Mackenzie financing a fixed 9.0%, a 3.0-point gap that is about $110 million a year on $3.65 billion, by our arithmetic.
Neoclouds, in Bloomberg’s words, are AI companies “which rent access to chips and other AI infrastructure”; our explainer has the basics. GPU clouds such as CoreWeave, Nebius and IREN own the chips and rent capacity. Next to them, companies such as Riot and TeraWulf, which Bernstein groups as emerging AI infrastructure, lease powered buildings to a lab tenant.
The difference shows up in revenue per megawatt. On a Bernstein exhibit relayed on X, which we have not verified, CoreWeave, Nebius and IREN made $8.2 million to $11.1 million of annualized revenue per active megawatt in the second quarter of 2026, against $1.3 million to $1.8 million for Cipher, TeraWulf, Core Scientific and Riot, as we reported. The exhibit says the IREN and emerging-AI figures are per contract.
Rate on debt for the same two borrowers in 2026: IREN’s Microsoft-anchored facility (6.00% blended, release, 1 June) vs its Mackenzie financing (9.0% fixed, 10-K); CoreWeave’s loan with a contract Bloomberg reported was Meta’s (fixed tranche ~5.9%, release, 31 March) vs its unsecured 2032 notes (9.625% coupon, 8-K, 18 June). Issue rates; deals differ in date and structure. Gaps are our arithmetic. Chart: FourWeekMBA.
How the Debt Gets Cheap
Both companies describe the customer contract as part of the security. IREN said its facility “is secured against the GPUs and associated contracted cash flows”, and that Fitch and DBRS rated it A and A(low). CoreWeave’s $8.5 billion loan of March, secured by GPUs and a customer contract that Bloomberg reported was Meta’s, “includes a floating rate tranche financed at SOFR + 2.25% and a fixed rate tranche financed at approximately 5.9%”.
In June CoreWeave sold senior unsecured notes due 2032 at a 9.625% coupon, about 3.7 percentage points above that fixed tranche, by our arithmetic. Our GPU debt piece sets out the full ladder, and our AI debt financing tracker follows every borrowing with its cost.
What the Customer Puts In
The contracts do more than promise rent. Nebius’s Form 20-F says Microsoft committed to pay fees estimated at up to $17,392.9 million “irrespective of actual utilization of the GPU capacity”, including upfront payments of about $6,958.1 million, 40% of the contract value by our arithmetic. IREN’s Form 10-K says 20% of each tranche’s value is paid before its delivery date on its $9.7 billion Microsoft contract.
Hosts use the same tool. Riot’s release on its 910-megawatt Corsicana lease says “Rent is payable on the full 910 MW irrespective of utilization”. At TeraWulf, Google agreed to backstop Anthropic’s rent on leases worth about $19 billion over 20 years, as we reported. Chief executive Paul Prager said: “We structured our Anthropic leases from the outset to address counterparty credit, financing costs and capital requirements”.
Risk One: Tenant Concentration
As we read the filings, a large offtake contract also concentrates revenue on one name; Riot gives the clearest figure. By our arithmetic, Anthropic’s two leases are about 97% of the $2.3 billion of 2029 lease revenue Riot estimates for its signed leases, as we reported. Nebius’s and IREN’s Microsoft contracts at their New Jersey and Texas sites total up to $27.1 billion, by our arithmetic in our satellite piece.
The TeraWulf backstop ends if Anthropic achieves and keeps investment grade credit ratings for at least three months, the 8-K says.
Risk Two: Power and Permits
A contract does not deliver electricity. ERCOT’s September board materials show about 194.3 GW of large loads conditionally kept in its Batch Zero study, 2.1 times the grid’s 91,134 MW record peak, by our arithmetic in our Texas piece. ERCOT says it “has paused the energization of new Large Load data centers and crypto mining facilities until the completion of the verification and audit and community impact review”.
AP called the Texas governor race for Gina Hinojosa at 04:17 UTC on 4 November. Her campaign site says: “We need an immediate moratorium on data centers to last until the legislature can meet to put in place real protections”. Riot’s new 10-Q includes a risk factor that, by our comparison, was not in its previous 10-Q or its 2025 10-K: “Increasing political and regulatory scrutiny of data centers in Texas could delay or prevent our data center development, increase our costs, and reduce the incentives available to our projects”.
New Jersey shows the permit side. Aterio data analyst Daud Shiraz told Business Insider that Nebius’s Vineland project struggled to get permits for its original power generators, then faced more approval delays after switching to fuel cells. Business Insider reported that regulators fined the developer DataOne $1 million in September for operating generators without the required permits.
Risk Three: Late Delivery
The offtake contracts carry delivery clocks. Nebius’s 20-F gives Microsoft the right to “terminate individual tranches in the event of specified delivery delays”. IREN’s 10-K targets the rest of its Texas Microsoft capacity for calendar Q4 2026, “with grace periods under the Microsoft Agreement for delivery extending from mid-Q4 of calendar 2026 to the beginning of Q2 of calendar 2027”.
Business Insider reported that satellite analysis by Aterio found IREN’s Horizon 4 building still missing backup generators and cooling equipment on 21 October, and that roughly 140 megawatts at Vineland could slip into 2027. On Microsoft’s 28 October call, chief financial officer Amy Hood said capital expenditures were $45.2 billion in the quarter, “as some third-party capacity deliveries we expected in Q1 were delayed”. Business Insider also reported that Microsoft ended a deal with Nscale in October over power-supply delays.
Risk Four: The Market Reprices the Rest
CoreWeave’s 2032 notes are senior unsecured, according to its 8-K. On FINRA’s TRACE data, CoreWeave’s 9.625% notes due 2032 last traded at 78.50 cents on the dollar on 4 November, a yield of 15.42%, as our neocloud selloff piece reported. That is about 9.5 points above the March loan’s fixed tranche, by our arithmetic.
CoreWeave’s 30 June balance sheet listed $5.52 billion of cash against $35.07 billion of debt, about 16 cents per $1, as we calculated. By our arithmetic, six neocloud stocks fell an average of 36.0% from the 2 October close to the 3 November close. The post relaying Bernstein’s note says Bernstein “is comfortable with existing contracts but questions renewal economics once compute becomes less scarce” for CoreWeave.
The same day showed the other side of the trade. Riot’s shares closed at $15.37 on 4 November, up 9.63%, according to Nasdaq.com, on the day its 10-Q named Anthropic as the tenant of the Corsicana lease. Amazon, Microsoft, Alphabet and Meta had added about $653 billion of market value by 1:09 p.m. ET that day, by our arithmetic in our market piece.
As we read the filings, the offtake contract does two jobs at once: it is part of the security behind the loans that cost about 6%, and it is the single tenant whose delivery dates and termination rights decide whether the rent arrives.
As we read the four risks together, they sit on different clocks: tenant concentration is fixed when a lease is signed, power and permits run on regulators’ timelines, delivery clauses run to dates such as the beginning of Q2 2027 in IREN’s 10-K, and bond prices move every trading day.
Nebius Group, Form 20-F
“terminate individual tranches in the event of specified delivery delays”
Three Implications
FOR GPU CLOUDS IREN’s Microsoft-anchored facility cost a blended 6.00% against a fixed 9.0% on its Mackenzie financing; CoreWeave’s 2032 notes last traded at 78.50, a yield of 15.42%, on 4 November.
FOR HOSTS Anthropic’s two leases are about 97% of Riot’s estimated 2029 lease revenue, by our arithmetic, and Google backstops Anthropic’s rent at TeraWulf’s Kentucky campus.
FOR THE TENANTS Nebius’s 20-F lets Microsoft terminate individual tranches for specified delivery delays, and the contract includes upfront payments of about 40% of its value, by our arithmetic.
The framework puts it this way: “The $1T capex cycle is being underwritten by a $1T concentrated demand commitment from two counterparties whose combined free cash flow is deeply negative.”
As we read it, neocloud debt sits one step below that commitment: in the deals we compared, the lowest rates are on loans backed by a Microsoft or Meta contract, while a host such as Riot draws about 97% of its estimated 2029 lease revenue from one lab, by our arithmetic. The framework, published in May 2026, does not discuss IREN, Riot or any neocloud loan.
The rates compared here are not like for like: they come from deals struck between March and August 2026, with different structures, sites and customers, and the $110 million figure is an illustration, not a saving any company reported. The Meta link to CoreWeave’s loan is Bloomberg’s; CoreWeave’s release does not name the customer. The Bernstein figures come from an exhibit relayed on X, and the satellite findings are Aterio’s as Business Insider described them.
Neither filing we read says whether Microsoft has used any delay remedy. Hinojosa’s pages set out a platform, not a law. We make no forecast on any company, contract or bond.
This Week In The AI Supercycle
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In the filings we read, the rate on neocloud debt differs with who stands behind the payments: IREN’s Microsoft-anchored facility cost a blended 6.00% and its Mackenzie financing a fixed 9.0%, a gap worth about $110 million a year on $3.65 billion, by our arithmetic. As we read the filings, the same contracts tie each company to a large tenant, to power and permit timelines, to delivery clauses such as Nebius’s tranche termination right, and, for the rest of its debt, to a bond market where CoreWeave’s 2032 notes last traded at 78.50 on 4 November.
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A note on sourcing. This analysis is built from IREN’s and CoreWeave’s releases and filings and from our own earlier pieces; third-party figures (Bloomberg, Business Insider, Bernstein via X, ERCOT, Nebius, Riot, TeraWulf, Microsoft) are cited as those pieces reported them. The Riot close is from Nasdaq.com. Gaps, shares and the $110 million illustration are our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
