IREN and Roundabout Investing
I've been reading Spitznagel over the past couple of weeks and live the "roundabout" concept. I believe IREN 0.00%↑ is a great example of a company who's leadership has applied it perfectly.
First, what is roundabout investing? In The Dao of Capital, Spitznagel says:
"The objective of roundabout Austrian Investing is not to find a way to make money now, but to position ourselves for better investment opportunities later. Or, as we might state it, we’re being patient now so that we can be strategically impatient later.”
For those familiar with IREN 0.00%↑ , they already probably know where I am going to.
The "average" Bitcoin mining company prioritized the short term profit through many small decisions in which IREN 0.00%↑ took instead the long, more painful path, to be better positioned in the future.
The average Bitcoin mining company developed container, low quality data centers specifically focused on Bitcoin mining, while IREN 0.00%↑ developed flexible, high quality data centers that can support high power computing activities.
Fast forward, while for the majority of the Bitcoin mining companies the best way to retrofit a bitcoin mining data center is with a bulldozer, IREN 0.00%↑ has Bitcoin miners operating side by side the AI Cloud Service in a data center in Canada.
The average Bitcoin mining company prioritized fast expansions through leases, while Iren's strategy consisted on a vertical integration in which IREN 0.00%↑ owns the land, the connection, electrical, and the data center infrastructure.
Fast forward, IREN 0.00%↑ is essentially the only profitable Bitcoin mining company thanks to the structural efficiencies from lower electricity costs (from strategic sites selection with efficient power access) and operating leverage with scale (from large sites selection and cost control).
The average Bitcoin mining company has a HODL strategy effectively diluting shareholders, while IREN 0.00%↑ sells its Bitcoin mining proceeds to finance its expansion.
Fast forward, the average Bitcoin mining company's profitability swings with Bitcoin price but its worse than Bitcoin since the core of the company's operations loses money, while IREN 0.00%↑ has built an efficient infrastructure whose profitability is resilient to Bitcoin price swings and is becoming more diversified with new income streams such as Cloud AI and AI data centers in the very near future.
Iren's motto is "PROCEED WITH PURPOSE".
On February 2020, back when IREN 0.00%↑ was Iris Energy, this strategy was outlined by the management in an Investor Presentation:
"1. Build data centers powered by low-cost renewable energy.
2. Bootstrap operations with Bitcoin mining.
3. Leverage asset base into other high growth, energy-intensive computing applications."
More than 5 years later, and after scaling almost 1GW (and securing 2GW to scale in 2026-2027), IREN 0.00%↑ has one of the best positions in the market (not limited to Bitcoin mining industry) to capitalize the AI / HPC wave:
750 MW (Childress, Texas), of which 75 MW (50MW IT load) are already being developed for AI/HPC and the rest can be efficiently retrofitted.
2 GW of which 1.4 GW (Sweetwater 1) will be energized by April 2026 and 0.6 GW (Sweetwater 2) will be energized by late 2027. Having 1.4 GW with energization within 1 year in the current, constrained data center market is nothing short of a trophy asset.
On his last interview with McNallie Money in May 16 2025, Dan Roberts said this regarding Horizon 1, the 50MW IT load direct-to chip liquid cooling data center designed to support next generation of NVIDIA chips:
"I am highly confident we're going to contract that prior to completion in Q4. We're at pretty advanced stages of diligence and commercial negotiations with parties. We got colocation full form agreements being circulated. Is a matter of moving through the process. These things may take a little bit longer than ideal, but it's just the nature. Don't forget that 50 MW of IT load support well over $1bn of computers. (...) There's very few sites in North America capable of delivering 20 MW plus of liquid cooled capacity this year and according to several prospects non that have then the expansion that we particularly got at Childress. A lot of these players (...) are pursuing this macro exponential trend that is unfolding and they are looking at growth: 'can you do 200, can you do 250? How quickly could you do that? Could we get options?' (...) We've got 2.9 GW. If it's all AI in 2-3 years time, then by definition is a good result because we're certainly not going to displace Bitcoin mining unless is clearly value accreative".
IREN ($IREN) Q3 FY 2025 Earnings Review
When I started researching , the interviews done by McNallie Money with Dan were an amazing resource to know more about and its leadership.
IREN 0.00%↑ has already built the asset base to be now "strategically impatient" as the AI opportunity is upon us. I believe that as soon as Horizon 1 is closed, the capital flywheel for IREN 0.00%↑ dramatically accelerates as access to financing will be a natural consequence.
We are very close from Iren being "an overnight success" (with 5+ years on the making).
Can't wait to see how this story unfolds.