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IREN shares surged in extended-trading on Thursday before giving back nearly all of the gains after the data center operator announced a partnership with semiconductor giant Nvidia .

Nvidia and IREN will deploy up to 5 gigawatts of the chip maker's DSX-branded infrastructure designs intended to power artificial intelligence workloads throughout the Australian firm's data center facilities across the world.

IREN shares climbed to around 27% as the news broke, then retreated and settled up about 6%.

The data center operator will issue Nvidia a five-year right to purchase up to 30 million shares of its ordinary stock at an exercise price of $70 per share, the company said in an announcement. Nvidia will have the right to invest $2.1 billion into the company via the deal.

"AI factories are becoming foundational infrastructure for the global economy," Nvidia CEO Jensen Huang said in a statement.…