Applied Digital signs $5.2 billion AI data center lease with US hyperscaler
AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration
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June 8 : Applied Digital has signed a 15-year lease with a U.S.-based hyperscaler at its Delta Forge 2 site which is expected to generate about $5.2 billion in revenue over the period, sending the company’s shares up 8.7 per cent in extended trading.
Major technology companies are raising their spending on data centers to support powerful artificial intelligence models, boosting demand for electricity, computing capacity and specialized facilities.
About 70 per cent of Applied Digital’s contracted revenue is now backed by U.S.-based investment-grade hyperscalers, the company said on Monday.
The new agreement covers 210 megawatts of computing capacity at Delta Forge 2, Applied Digital’s new AI Factory campus, under a take-or-pay lease structure.
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The company did not give more details on its new customer, but said the deal marked its third long-term lease with the same investment-grade hyperscaler.
If all renewal options are exercised, the contract could generate about $12.7 billion in revenue over a 30-year period.
Applied Digital’s contracted portfolio now spans five campuses, representing 1.4 gigawatts of critical IT load and about 2.15 gigawatts of grid-connected utility power.
The company said its contracted base-term lease revenue has increased to about $36 billion and would rise to roughly $86 billion if all renewal options are exercised.
Delta Forge 2 will use Applied Digital’s waterless cooling technology and high-power density infrastructure designed for AI workloads. Initial operations at the campus are expected to begin in the first quarter of 2028.
Source: Reuters
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