Shares of IREN Ltd. (NASDAQ: IREN), an AI cloud and data-center operator, fell more than 4% to $23.90 in premarket trading Monday after Elon Musk warned that hundreds of specialized AI cloud providers could go out of business or be forced to merge. Musk also ruled out SpaceX acquiring any neocloud companies.
The decline coincided with share-price declines in fellow AI infrastructure companies CoreWeave (CRWV) and Nebius Group (NBIS).
In a Sunday post on X, Musk said lenders had nearly stopped providing financing to companies without substantial revenue outside AI data centers. He predicted that more than 200 neocloud providers would face what he called “guppy-level death and consolidation,” adding that only a small number would survive.
Responding to speculation that his comments were intended to push down neocloud stock prices ahead of potential acquisitions, Musk wrote, “SpaceX is not buying any neoclouds. Pointless.”
Musk also said SpaceX had closed $40 billion in debt financing to purchase graphics processing units, or GPUs, used in AI computing. He attributed the company’s access to borrowing to its investment-grade credit rating and revenue from Starlink satellite services and rocket launches.
However, Bloomberg reported that discussions over the debt’s pricing remained ongoing as of late Sunday and that the financing had not yet been priced, despite Musk’s statement that the deal had closed.
IREN Shares Trade Below Previous 52-Week Low in Premarket
IREN shares had already fallen about 47%, from $47.05 on September 23 to $24.905 at Friday’s close. Monday’s $23.90 premarket quote placed the stock nearly 69% below its 52-week high of $76.87 and below the previous regular-session 52-week low of $24.855, recorded October 22.
Short interest in IREN stood at 81.65 million shares as of September 30, up from 55.88 million at the end of March but below the 98.22 million shares reported at the end of July.
Separately, IREN Limited Tokenized bStocks (IRENB) was trading at $23.91, down 3.28% over 24 hours, according to CoinMarketCap. The tokenized instrument’s 24-hour performance is separate from the Nasdaq-listed shares’ premarket movement.
Gartner Forecasts Widespread Neocloud Consolidation by 2030
Musk’s warning followed an October 14 Gartner report predicting that more than 80% of neocloud providers would cease operating independently by 2030 because of rising costs and insufficient differences between competing business models.
Gartner estimated that spending on AI-optimized infrastructure-as-a-service (IaaS) would rise from $66 billion in 2027 to $174 billion in 2030. Despite that growth, the research firm warned that most AI computing providers would struggle to recover their infrastructure investments before the current generation of AI chips is replaced.
The forecast concerns the industry’s loss of independent operators, including through consolidation, rather than necessarily the closure of every affected business. It does not establish that IREN itself will fail or lose its independence.
IREN is scheduled to report its fiscal first-quarter 2027 financial results on November 5, followed by a conference call at 5 p.m. Eastern Time.