Applied Digital has secured a $5 billion lease agreement with a leading U.S.-based hyperscaler for its North Dakota Polaris Forge 2 Campus, providing 200 MW of AI infrastructure over 15 years. This deal underscores the company’s rapid growth in building scalable, efficient data centers for the AI era.
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The agreement generates $5 billion in contracted revenue, with potential expansion to 1 GW at the campus.
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Applied Digital now has 600 MW leased across its Polaris Forge campuses to major hyperscalers, enhancing its position in AI infrastructure.
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The Polaris Forge 2 site features a projected power usage effectiveness (PUE) of 1.18 and near-zero water usage, promoting sustainable operations with data from company disclosures.
Discover how Applied Digital’s $5 billion hyperscaler lease deal boosts AI infrastructure growth. Explore revenue potential and stock impacts in this in-depth analysis. Stay informed on key developments.
What is the Applied Digital $5 Billion Lease Deal with a Hyperscaler?
Applied Digital $5 billion lease deal involves a long-term agreement with a U.S.-based investment-grade hyperscaler to utilize 200 MW of purpose-built AI and high-performance computing (HPC) infrastructure at the North Dakota Polaris Forge 2 Campus for 15 years. This contract, announced in an October 22 press release, secures $5 billion in total revenue and includes a first right of refusal for an additional 800 MW, supporting the campus’s full 1 GW potential. The partnership highlights Applied Digital’s expertise in delivering efficient, scalable data centers tailored for advanced computing needs.
How Does This Deal Strengthen Applied Digital’s Position in AI Infrastructure?
Applied Digital’s latest agreement builds on its existing leases, totaling 600 MW across Polaris Forge 1 and 2 campuses in North Dakota, both dedicated to hyperscalers. The Polaris Forge 2 facility, spanning over 900 acres, is engineered for optimal efficiency with a projected PUE of 1.18—among the lowest in the industry—and virtually no water consumption, aligning with sustainable practices as outlined in company reports. This design supports high-density AI workloads, including liquid cooling systems that enable rapid deployment.
Industry experts note that such efficiency metrics reduce operational costs by up to 20% compared to traditional data centers, according to analyses from energy efficiency benchmarks. Wes Cummins, Chairman and CEO of Applied Digital, emphasized the company’s edge in execution, stating that delivering projects on time differentiates them in a market where delays are common. The phased rollout begins with 200 MW across two buildings, coming online in 2026 and fully operational by 2027, demonstrating Applied Digital’s commitment to meeting the surging demand for AI computing resources.
Supporting data from Applied Digital’s disclosures shows the campus’s “Different by Design” philosophy integrates advanced power density and sustainability features, positioning the company as a leader in the evolving AI landscape. Quotes from Cummins further illustrate this: the company’s AI factories are redefining hyperscale infrastructure, powering the next era of intelligence from U.S. heartland locations built responsibly and delivered swiftly.
Frequently Asked Questions
What are the key terms of Applied Digital’s $5 billion hyperscaler lease agreement?
The deal leases 200 MW of critical IT load and HPC infrastructure at Polaris Forge 2 for 15 years, generating $5 billion in revenue. It includes a first right of refusal for 800 MW more, with the initial phase activating in 2026 and full capacity by 2027, based on the company’s press release details.
Why did Applied Digital’s stock surge after the lease announcement?
Applied Digital (NASDAQ: APLD) shares rose over 7% on the announcement day, reflecting investor optimism about the $5 billion revenue stream and expansion potential. This rebound came after recent volatility, as the deal validates the company’s growth in AI infrastructure, making it a strong pick for those tracking hyperscaler partnerships via voice search queries on market movements.
Key Takeaways
- Revenue Milestone: The $5 billion contract over 15 years solidifies Applied Digital’s financial outlook, with options for further 800 MW expansion at Polaris Forge 2.
- Efficiency Leadership: The campus’s 1.18 PUE and low water usage set benchmarks for sustainable AI data centers, reducing costs and environmental impact.
- Execution Focus: Prioritizing fast delivery, as highlighted by CEO Wes Cummins, positions Applied Digital ahead in the competitive AI infrastructure race—investors should monitor upcoming phases for sustained growth.
Conclusion
The Applied Digital $5 billion lease deal with a prominent hyperscaler marks a pivotal step in expanding AI infrastructure capabilities at the North Dakota Polaris Forge 2 Campus, emphasizing efficiency and scalability in secondary markets. With 600 MW now committed across sites and potential for 1 GW total, the agreement reinforces the company’s role in powering the intelligence era through innovative, sustainable designs. As AI demand accelerates, Applied Digital’s focus on rapid execution and strong partnerships positions it for continued success—stakeholders are encouraged to watch for operational updates and market responses in the coming months.
Applied Digital’s strategic moves in AI infrastructure leasing continue to draw attention amid broader industry shifts. The Polaris Forge 2 Campus, with its advanced features, exemplifies how U.S.-based builders are adapting to hyperscaler needs. CEO Wes Cummins’ insights on execution underscore the challenges of scaling large projects, where timing often outpaces mere announcements.
Financially, the deal enhances revenue visibility, but recent stock fluctuations highlight investor caution. APLD shares, trading around $33, have faced pressure from insider sales—including 400,000 shares by Cummins for $6 million and 75,000 by CFO Muhammad LaVanway for $1.1 million—fueling speculation on valuation sustainability. Despite $11 billion in total committed revenue, concerns over competitive pressures and AI market corrections persist, prompting a balanced view of growth prospects.
Analysts from financial reports suggest that while top-line expansion is robust, profitability metrics remain key to long-term confidence. The company’s moat in efficient, heartland-located facilities could mitigate risks, but execution on the 2026-2027 timeline will be crucial. This development not only boosts Applied Digital’s profile but also signals resilience in the AI sector’s infrastructure backbone.
