IREN said on 5 November that a short-term GPU cloud contract it signed after its first fiscal quarter brings in $40 million of revenue per megawatt of IT load a year, against about $22 million on a five-year contract, according to its quarterly results release. The shorter deal pays about 1.8 times as much per megawatt, by our arithmetic.
Nebius showed the same step in its second-quarter letter: annual contract value per MW above $20 million for its second-quarter deals and above $40 million for third-quarter short-term capacity deals. At the long end, data center leases of 10 to 15 years signed by Cipher, TeraWulf and Applied Digital come to $1.65 million to $1.87 million per MW a year, by our arithmetic, so IREN’s five-year rate is about 12 times Applied Digital’s CoreWeave lease.
Business Pill · Neoclouds Explained: Renting the Chips by the Hour
An evergreen Business Engineer explainer on neoclouds, the providers that rent GPUs by the hour. It teaches the general idea only and does not discuss these contracts.
The key insight: As we read the filings, the per-megawatt price of AI compute falls with contract length mostly because the product changes: IREN’s five-year GPU cloud rate of about $22 million per IT-MW is about 12 times the $1.83 million a year Applied Digital’s 15-year CoreWeave lease works out at, by our arithmetic. Within GPU cloud alone, IREN’s short-term rate of $40 million is about 1.8 times its five-year rate.
IREN’s release lists, after the quarter ended 30 September, a “short-term contract for $40 million per IT-MW of revenue” and “Approximately $22 million per IT-MW on a five-year contract including customer prepayment covering 90% of associated GPU capex”. Its footnote defines revenue per IT-MW as “estimated annual revenue per MW (IT)”. The release does not give the length of the short-term contract or name either customer.
The same release says “Contracted pricing continues to rise: +11% on 3-year deals and +12% on 5-year deals”, a measure IREN describes as estimated average annual revenue per MW for contracts signed in its fourth fiscal quarter of 2026 and first of 2027, weighted by ARR.
Nebius’s Q2 2026 shareholder letter, filed with the SEC on 12 August, says “ACV per MW is stepping up”, listing Q2 deals at more than $20 million, Q3 short-term capacity deals at more than $40 million and a 2026 base of $12 million; ACV is annual contract value. The letter says Nebius sees “a priceopportunity in the $40-50 million per MW range and we signed our first one this week”. It also says 70% of deals included prepayments covering 50% to 60% of the associated capex.
Revenue per megawatt of IT load per year against contract term. The 2026 IREN points are IREN’s own estimates; the other points are our arithmetic (contract value divided by megawatts and years of term, a straight average). GPU cloud service contracts include the GPUs; leases cover data center space and power only. Sources: company 8-Ks and Applied Digital’s 10-K.GPU cloudprice steps disclosed by IREN (estimated annual revenue per IT-MW, 5 November 2026) and Nebius (annual contract value per MW, Q2 2026 letter). IREN’s 2025 Microsoft figure is our arithmetic ($9.7 billion over 200 MW and five years); ratios are our arithmetic and approximate where Nebius gives “more than” figures.
The Long End: Leases of 10 to 25 Years
Lease contracts state a total value, a term and a megawatt figure, so a yearly rate per MW can be worked out. Cipher’s 10-year Barber Lake lease to Fluidstack, about $3 billion for 168 MW of critical IT load, comes to $1.79 million per MW a year, by our arithmetic. TeraWulf’s two 10-year Fluidstack leases, about $3.7 billion for more than 200 MW, come to under $1.85 million.
Applied Digital’s annual report lists 15-year leases on five campuses. CoreWeave’s 400 MW at Polaris Forge 1, about $11.0 billion, works out at $1.83 million per MW a year; the hyperscaler leases at Polaris Forge 2, Polaris Forge 3, Delta Forge 1 and Delta Forge 2 work out at $1.65 million to $1.67 million, by our arithmetic. Applied Digital’s contracted leases are the subject of our piece on its lease-to-equity ratio and our breakdown by tenant.
The longest leases do not come out cheaper per year. TeraWulf’s 20-year Anthropic lease in Hawesville, Kentucky, about $19 billion for about 401 MW, comes to $2.37 million per MW a year, and the 25-year Abernathy lease to Fluidstack, about $9.5 billion for 168 MW, signed in 2025 by a TeraWulf joint venture, to $2.26 million, by our arithmetic. TeraWulf has agreed to sell its Abernathy stake, and its 10-Q says that sublease carries contractual rent escalators; our figures are straight averages over the term.
Two Different Products
The two ends of the range are not like for like. IREN’s Microsoft agreement, its 8-K says, provides “access to dedicated GPU infrastructure capacity”, so the price covers the GPUs: IREN agreed to buy them from Dell for about $5.8 billion. The leases are for data center space and power; Cipher’s AWS release calls its lease “turnkey space and power for AI workloads”.
IREN’s first Microsoft contract shows how far GPU pricing has moved within one company. The 8-K gives approximately $9.7 billion over a five-year average term for about 200 MW, or $9.7 million per MW a year, by our arithmetic; IREN’s new five-year contract at about $22 million is about 2.3 times that, as we reported on 11 November. Its $3.4 billion five-year contract with Nvidia, deployed “within 60MW” of existing data centers, comes to at least $11.3 million.
The Deals Without a Megawatt Figure
The largest GPU cloud contracts give a term and a value but no megawatts, so no per-MW rate can be worked out from the filings. Nebius’s Microsoft agreement is five years and about $17.4 billion through 2031; its 2026 agreement with Meta is a series of five-year orders worth up to about $27 billion. CoreWeave’s Meta order runs to 14 December 2031 for up to about $14.2 billion, and a second order to December 2032 for about $21 billion.
CoreWeave’s three OpenAI contracts run to October 2030, April 2029 and 31 May 2031, for up to about $11.9 billion, $4.0 billion and $6.5 billion. Most of the GPU cloud contracts sit at around five years and most of the leases at 10 to 25, the filings show.
The Structural Read
As we read IREN’s release, the five-year contract trades price for funding: about $22 million per IT-MW, with the customer prepaying 90% of the associated GPU capex, against $40 million on the short-term deal, for which the release gives no prepayment.
As we read the lease figures, a longer term did not buy a lower yearly rate: TeraWulf’s 20-year Anthropic lease and the 25-year Abernathy lease work out at $2.37 million and $2.26 million per MW a year, above the $1.65 million to $1.87 million of the 10- and 15-year leases, by our arithmetic.
IREN, Q1 FY27 results release, 5 November 2026
“Since quarter-end we have signed a five-year contract at about $22 million per megawatt with 90% of the GPU capex prepaid by the customer, and a short-term contract at $40 million per megawatt.”
Three Implications
FOR GPU CLOUD PROVIDERS IREN puts a short-term contract at $40 million per IT-MW a year and a five-year one at about $22 million; Nebius reports above $40 million for short-term capacity deals and above $20 million for its second-quarter deals.
FOR DATA CENTER LANDLORDS Leases of 10 to 15 years at Cipher, TeraWulf and Applied Digital work out at $1.65 million to $1.87 million per MW a year, and the 20- and 25-year leases at $2.37 million and $2.26 million, by our arithmetic.
The framework argues: “It is a layered industrial stack — and at any given moment the binding constraint sits at a different layer than it did six months ago.”
As we read it, the contract terms track that stack: the GPU layer is sold on short and five-year contracts at $22 million to $40 million per IT-MW a year in IREN’s figures, while the space-and-power layer is leased for 10 to 25 years at about $1.7 million to $2.4 million, by our arithmetic. The framework predates these contracts and does not discuss them.
What Is Not Established
The lengths of IREN’s short-term contract and of Nebius’s second-quarter deals are not given in the lines we read, and neither company names those customers. IREN’s per-MW figures for these contracts are its own estimates of annual revenue per MW (IT). Our lease figures divide total contract value by megawatts and years, ignoring escalators, ramp-up and timing.
Cipher’s 15-year AWS lease, about $5.5 billion for 300 MW, would come to $1.22 million per MW a year, but the release does not say whether the 300 MW is critical IT load, so we leave it out of the comparison. GPU counts are not given in any of the filings we read. Lenders’ and tenants’ credit support also differs: Google backstops part of Fluidstack’s obligations to Cipher and TeraWulf, the filings say, and Bloomberg has reported Applied Digital asked tenants for guarantees, as we covered on 15 November.
This Week In The AI Supercycle
AI Lost Its Central Banker, the Lab Oligopoly, and the Future of Open Source
This week’s issue: the Nvidia leadership change, read as the AI build-out losing its central banker: who now finances the GPU landlords, backstops the data centres and sponsors open models, and why two labs are becoming the bank.
IREN’s own figures put a short-term GPU cloud contract at $40 million per IT-MW a year and a five-year one at about $22 million, about 1.8 times apart, by our arithmetic; Nebius reports above $40 million for short-term deals and above $20 million for its second-quarter deals. Data center leases of 10 to 15 years come to $1.65 million to $1.87 million per MW a year, by our arithmetic.
A note on sourcing. The contract terms, values and megawatt figures are from the companies’ own filings with the SEC: IREN’s 8-Ks of 3 November 2025, 7 May 2026 and 5 November 2026; Nebius’s 6-Ks of 8 September 2025, 13 November 2025, 16 March 2026 and 12 August 2026; CoreWeave’s prospectus, 10-Q and 8-Ks; Cipher’s, TeraWulf’s and Applied Digital’s 8-Ks; Applied Digital’s 10-K for the year to 31 May 2026; and TeraWulf’s 10-Q for the quarter to 30 September 2026.
IREN’s per-MW figures for its 2026 contracts and Nebius’s ACV per MW are the companies’ own estimates. The other per-MW yearly figures and the ratios are our arithmetic: contract value divided by megawatts and by years of term, a straight average that ignores escalators, ramp-up and timing. The guarantee request is Bloomberg’s report of 14 November, which we read as relayed by Techmeme. The companies were not contacted for this piece.
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.
