applied digital announced Wednesday that it has signed a $5 billion infrastructure lease agreement with the U.S. hyperscaler.
The data center company’s stock price fell more than 7% following the announcement, continuing a recent slump that saw the stock drop more than 20% over the past week. The stock price has nearly quadrupled since the beginning of this year.
The lease announced Wednesday will be for approximately 15 years and provide 200 megawatts of capacity at the company’s Polaris Forge 2 campus in North Dakota. This brings the company’s total leased capacity at its two Polaris Forge campuses to 600 megawatts.
Across the technology industry, major cloud providers and other internet giants are rapidly investing in artificial intelligence infrastructure and announcing plans for massive new data centers to meet the expected surge in demand. Applied Digital did not reveal the names of its partners in the latest deal, only that it is an “investment-grade hyperscaler.”
In an interview with CNBC’s “Squawk on the Street,” CEO Wes Cummins said of the five U.S. hyperscalers: microsoft, meta, oracle, Amazon and google“So that’s who we’re really targeting.” Tenants in the first lease, he said. coreweave.
“We started down this path a few years ago and we had a few failures, but I think we’ve really ramped up the process of building capacity at scale,” Cummins said, adding that the company has an “active pipeline” of 4 gigawatts.
In June, Applied Digital announced that it had signed two long-term leases with CoreWeave for 250 megawatts of capacity. The company said it expects to generate $7 billion in rental income over 15 years, and shares soared 48% on the news.
Applied Digital also secured $5 billion in infrastructure funding from Macquarie Asset Management earlier this month.
“We believe Polaris Forge 2 will build on that momentum, reflecting the strength of our partnership and the speed with which we are reshaping the AI infrastructure landscape,” Cummins said in a release Wednesday.
