Applied Digital, a designer and operator of next-generation digital infrastructure for high-performance computing (HPC) applications, is strategically leveraging artificial intelligence (AI) demand to drive its growth.
Through two major, approximately 15-year lease agreements with CoreWeave — an AI-focused hyperscaler — Applied Digital will provide 250 megawatts (MW) of critical IT load at its Ellendale, North Dakota data center campus. This partnership is expected to generate approximately $7 billion in revenue for Applied Digital over the lease terms.
AI plays a pivotal role in Applied Digital’s business model, as the demand for AI and HPC infrastructure accelerates globally. CoreWeave’s AI-driven workloads are shaping the design and scaling plans of the Ellendale campus, which is purpose-built for next-generation computing needs. With the capacity to expand up to 1 gigawatt, Ellendale is envisioned as a scalable AI and HPC hub. CoreWeave’s option to access an additional 150 MW of power further highlights the potential for continued growth in AI applications.
The partnership demonstrates how AI is influencing the infrastructure landscape by requiring large-scale, high-density, energy-efficient data centers capable of supporting advanced workloads. Applied Digital’s Ellendale campus, designed for speed, efficiency, and sustainability, positions the company as a key player in the evolving AI ecosystem. The first 100 MW data center is expected to go live by late 2025, with further phases scheduled for 2026 and 2027.
A Strategic Win for Applied Digital
The deal marks a significant step in Applied Digital’s strategy toward becoming a data center-focused real estate investment trust (REIT), amid challenges in the broader hosting sector.
Shares of Applied Digital surged 17 percent in premarket trading following the announcement, while CoreWeave’s stock gained nearly 4 percent, Reuters news report said.
“These leases solidify Applied Digital’s position as an emerging provider of infrastructure critical to the next generation of artificial intelligence and high-performance computing,” Wes Cummins, Chairman and CEO of Applied Digital, said in a news statement.
Applied Digital’s Ellendale campus is designed as a scalable hub for advanced compute workloads, with the potential to host over 1 gigawatt of IT load. The site offers low-cost energy and is engineered for high-density compute, making it a prime location for AI and HPC clients. The first 100 MW data center for CoreWeave is expected to go live in Q4 2025, with a second 150 MW facility targeted for mid-2026. CoreWeave also has an option for an additional 150 MW building by 2027.
The Rise of Neoclouds
CoreWeave is part of a new wave of specialized cloud providers, often referred to as “neoclouds,” that rent out Nvidia’s advanced AI chips to software developers. These providers help meet surging demand for AI computing capacity while reducing the financial burden of operating AI-centric infrastructure.
By leasing from Applied Digital, CoreWeave can expand rapidly without the upfront capital expense of building and owning data centers. Applied Digital, in turn, locks in a long-term revenue stream that could stabilize its transition into an AI-focused data center REIT.
Applied Digital’s success with CoreWeave may set a template for future deals, as the AI infrastructure boom drives demand for purpose-built, high-density data centers across North America. The Ellendale campus, according to Cummins, represents more than just a project — it’s a launchpad for the future of AI infrastructure.
InfotechLead.com News Desk
