Applied Digital secures $5B Macquarie deal to power 2 GW HPC data center expansion
Applied Digital, a provider of digital infrastructure and cloud services, has partnered with Macquarie Asset Management (MAM) for up to $5 billion in funding to support high-performance computing (HPC) growth.
MAM will initially invest up to $900 million in Applied Digital’s Ellendale HPC Campus and has the right to invest an additional $4.1 billion in Applied Digital’s future HPC projects over 30 months.
The funding will help develop over 2 GW of HPC data center capacity, including the 400 MW Ellendale HPC Campus. Applied Digital will recover an estimated $300 million of its equity investment in the Ellendale project.
“We believe this expanded relationship with MAM positions Applied Digital for significant growth in the industry, establishing Applied Digital as one of the fastest-growing HPC data center owners, operators and developers in the United States,” says Wes Cummins, Chairman and CEO of Applied Digital. “At today’s build costs, we will have a significant portion of the equity needed to construct over 2.0 GW of HPC data center capacity, including our Ellendale HPC Campus.”
MAM’s investment includes perpetual preferred equity and a 15% common equity stake in Applied Digital’s HPC business, leaving Applied Digital with 85% ownership.
The agreement positions Applied Digital as a leading U.S. designer, builder, and operator of HPC data centers for advanced AI workloads.
The funding will also repay $180 million in existing project-level debt and cover general administrative and transaction expenses. MAM’s preferred equity will accrue a 12.75% annual dividend, with redemption possible after five years.
Applied Digital’s minimum equity contribution is $1 million per MW for Ellendale and $750,000 per MW for future projects. The deal is contingent on Applied Digital securing a lease with a hyperscaler for the 100 MW Ellendale data center. MAM will initially fund $225 million, with additional funding tied to further lease agreements.
Applied Digital aims to deliver efficient, purpose-built data centers for AI, machine learning, and HPC workloads. The company leverages advanced technologies like closed-loop liquid cooling and access to stranded power.
The partnership is expected to establish Applied Digital as a leader in Tier 3 data center infrastructure. Northland Capital Markets, Goldman Sachs, and other financial advisors supported the transaction.
The funding will enable Applied Digital to meet growing demand for generative AI and HPC solutions.
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Article Topics
AI/ML | Applied Digital | data center | funding | HPC
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