If a GPU server fails, what does the server maker owe the buyer?
Dell must repair or replace defective equipment. If it cannot do so within a reasonable time, it refunds the price depreciated straight-line over five years, when the server is returned. IREN’s agreement keeps the cost of repairs and replacements outside Dell’s liability cap, which in the standard terms is what the buyer paid in the previous 12 months; for the GB300 order the cap is redacted. IREN could also elect an extra warranty for years four and five. Dell agreed that its support should not need access to the end customer’s data, and that it would work with both IREN and its customer to limit any access it does need. For lenders: a failed server returns as a depreciated refund, not new equipment, so the refund should go to prepayment.
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What the filed contracts say
Contract
What the filed wording says
Dell–IREN purchase agreement
Dell must repair or replace defective equipment.
Dell–IREN purchase agreement
If it cannot, it refunds the price depreciated straight-line over five years.
Dell–IREN purchase agreement
Repair and replacement costs do not count against the liability cap.
Dell–IREN purchase agreement
The standard cap is what the buyer paid in the 12 months before the claim.
Dell–IREN GB300 order terms
The buyer could elect a further warranty for years four and five.
Dell–IREN GB300 order terms
Dell’s support should not need access to the end customer’s data.
The filed wording
7.1 Equipment Warranty. Supplier warrants that Equipment, under normal usage and with regular recommended service, will be free from material defects in material and workmanship, and that Equipment will perform substantially in accordance with the corresponding standard documentation issued by Supplier for the applicable Equipment. Unless provided otherwise in a Schedule, additional terms governing the limited warranties for Equipment are found at www.dell.com/warrantyterms or in the applicable documentation or Product Notice for the specific Equipment. Supplier’s entire liability for a breach of this warranty shall be for Supplier, at its option and cost, to repair or to replace the affected Equipment, and, if Supplier is unable to effect such within a reasonable time, then Supplier will refund the amount Customer paid for the affected Equipment as depreciated on a straight-line basis over a 5 year period, upon return of such Equipment to Supplier.
Dell purchase agreement with IREN’s Hardware 3 subsidiary (GPU servers), amending Dell’s Commercial Terms of Sale, Commercial Terms of Sale, clause 7.1 · IREN 10-Q, Exhibit 10.4
Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.
InfraCompute Weekly
The week in compute finance, read from the filings.
Deals, terms and the clauses behind them, for the people financing data centres, GPU clouds and the power behind them. By Randeep Bubbra.
