Applied Digital Secures $7 Billion Revenue From Coreweave AI Data Center Leases
$APLD
In a significant development for the tech and real estate sectors, Applied Digital (NASDAQ:APLD) has announced a monumental $7 billion deal with CoreWeave (NASDAQ:CRWV), involving long-term lease agreements for AI data centers. This strategic move not only underscores the growing demand for data centers but also marks a pivotal shift for Applied Digital towards becoming a real estate investment trust focused on data center properties. The deal encompasses two lease agreements spanning approximately 15 years each, expected to generate substantial revenue for Applied Digital.
CoreWeave, which recently went public, has also seen a positive impact from this deal, with its shares experiencing a notable increase. The company’s public offering price was initially set at $40 per share and it has since climbed significantly. This partnership is not just a financial arrangement but a strategic alignment of two tech entities poised to capitalize on the burgeoning demand for AI and high-performance computing infrastructure.
Applied Digital plans to deliver a substantial 250 megawatts of IT critical load to host CoreWeave’s operations, with options for further expansion, highlighting the scale and ambition of this venture. The broader implications of this deal extend beyond the immediate financial benefits for both companies. For the industry, it represents a significant investment in the infrastructure required to support advanced computing technologies, which are becoming increasingly central to a variety of business operations and services.
As both companies embark on this long-term partnership, the tech and real estate sectors may well see new standards set for investments and operations in the data center domain. This strategic move could pave the way for further innovations and collaborations that will shape the future of digital infrastructure development.
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