Microsoft has struck a $9.7 billion deal with data-center operator IREN that includes access to Nvidia's advanced chips, aiming to ease the computing crunch that has kept the tech giant from fully cashing in on the artificial intelligence boom.

The news sent shares of IREN up more than 20% in premarket trading on Monday. AI-server maker Dell rose 5% as it would provide IREN with Nvidia's GB300 chips and other equipment Microsoft will use for about $5.8 billion.

The five-year deal shows the AI industry's growing hunger for computing power to run applications such as ChatGPT. It follows earnings from major tech companies last week that underscored capacity shortages were limiting their ability to fully benefit from the boom.

Partnering with IREN would allow Microsoft to expand computing capacity without building new data centers or securing additional power - two of the biggest hurdles slowing its ability to meet surging AI demand.

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It will also sidestep heavy capital spending on chips that will lose value as newer, more powerful processors arrive.

IREN, which has a market value of $16.52 billion after a more than six-fold surge in its shares this year, has multiple data centers across North America with a total capacity of 2,910 megawatts. Its facilities are powered fully by renewable energy.

IREN said the Nvidia processors are scheduled for phased deployment through 2026 at its 750-megawatt Childress, Texas, campus, alongside new liquid-cooled data centers designed to deliver about 200 megawatts of critical IT capacity.

Cash from Microsoft's prepayment will help finance part of its $5.8 billion Dell deal, IREN said in a filing. Its Microsoft contract could be terminated if it fails to meet the delivery timelines.

Microsoft CFO Amy Hood said last week the company now expects its AI capacity crunch to stretch into at least mid-2026, after previously predicting they would improve later this year.