Xinyun shares fell more than 20% in a week, and IREN (IREN.US) CEO urgently appeased the market: zero data center debt, 96% GPU costs under the Microsoft contract were covered by prepayments and loans

The Zhitong Finance App learned that Daniel Roberts, co-CEO of IREN Limited (IREN.US), said that the company's data center is not burdened with any debt. Roberts' response was in response to investors' concerns about the expansion financing of artificial intelligence (AI) cloud service providers.

Roberts said on X (originally Twitter) that IREN has been paying for its data center construction expenses in cash until now. He added that once the site goes online with contracted customers, these facilities will be able to support their own financing. Roberts explained the process step by step. Customers must first sign a multi-year “pay-as-you-go” contract — they must pay regardless of whether they use computing power or not. He notes that in a recent three-year deal, the down payment covered 45 to 55 percent of the graphics processing unit (GPU) cost.

He added that the rest was mostly funded by lenders, with GPUs as collateral. According to Roberts, IREN's contract with Microsoft (MSFT.US) was supported by a loan with an A rating of A and an interest rate of about 6%. This loan, together with the down payment, accounts for 96% of GPU expenses. At Iren's McKenzie site in British Columbia, a customer with no investment grade rating borrowed at a fixed 9% interest rate.

The co-CEO added that the loan combined with the down payment already exceeds the full cost of the GPU. He admits that future debt will be priced at any interest rate offered by the market. However, he said that the payback period for recent contracts is about 2 years, which means “widening interest spreads can hardly shake the financial accounts of this business.”

Demand exceeds construction capacity

According to Roberts, customer demand has exceeded IREN's production capacity. He added that the company almost sold out of production capacity in 2026, and the price of the recent three-year contract was more than double that of last year. Demand for production capacity arriving in 2027 has been oversubscribed several times, and negotiations on 2028 have begun. He said that the stuck part of the industry is not signing the order, but getting the GPU online — because the entire industry's announced production capacity is “sleeping.”

Pressure on Xinyun stocks continues

New cloud vendors have continued to be under pressure over the past week. The stock has dropped more than 20% in the past week. Investors are increasingly concerned after CoreWeave (CRWV.US) debt pressure intensified and a research institution warned that more than 80% of new cloud vendors may no longer be able to operate independently by 2030.

Analysts believe that the core of this turmoil is not a single company's balance sheet, but rather a systematic torture of the “new cloud” business model. The picture drawn by Roberts — “customer prepayment, bank and loan, GPU collateral, two-year payback” — is logical at the contract level, but the premise is that demand continues to be strong and contract execution is worry-free.

The problem is that what is currently stuck in the industry is not signing orders, but GPUs cannot be launched as scheduled. Once “sleeping production capacity” expands, the beautiful figure for prepayment coverage may quickly expire.

Behind the market voting with their feet is a repricing of the combined risks of the “era of high yields+high leverage expansion”. Roberts acknowledged that future debt would be priced at market interest rates, but insisted that short-term payback would be enough to hedge against pressure on interest spreads.

Investors are clearly not satisfied with verbal assurances: when financing costs for Microsoft-level customers have reached 6%, and customers without investment ratings borrow at a fixed interest rate of 9%, any deterioration in the interest rate environment will be magnified exponentially. For the new cloud sector to regain trust, what is needed is not a CEO post, but real money cash flow and production capacity that is delivered on schedule.