TLDR: Applied Digital is making significant strides in the artificial intelligence sector by securing substantial capital and planning a massive expansion of its high-performance computing (HPC) data center infrastructure, including gigawatt-scale facilities, to meet the surging global demand for AI compute power.
Applied Digital (NASDAQ: APLD) is aggressively repositioning itself at the forefront of the artificial intelligence revolution, undertaking significant capital raises and embarking on an ambitious infrastructure expansion to become a dominant player in the high-performance computing (HPC) data center market. This strategic pivot from its cryptocurrency mining origins to a dedicated AI infrastructure provider has been met with considerable investor optimism, reflected in a remarkable surge in its stock price and positive analyst sentiment.
Central to this transformation are strategic capital infusions. On January 14, 2025, Applied Digital announced a landmark partnership with Macquarie Asset Management (MAM) for a perpetual preferred equity financing facility totaling up to $5.0 billion. An initial $900 million from MAM is specifically directed towards its Ellendale HPC data center campus in North Dakota, enabling the company to repay project-level debt and recover capital.
The company’s infrastructure strategy centers on purpose-built, high-density facilities, often referred to as ‘AI Factories,’ located in North Dakota to leverage low energy costs and cool climates.
Key Infrastructure Projects:
Ellendale HPC Campus (Polaris Forge 1): This campus is designed to scale up to 1 gigawatt (GW) of capacity. It has secured multi-year lease agreements, most notably an expanded 15-year lease with AI hyperscaler CoreWeave for 400 MW of critical IT load, which is projected to generate approximately $11 billion in revenue over the lease term. The first 100 MW facility is expected to be operational by late 2025, with subsequent phases bringing the second 150-megawatt facility online in mid-2026 and a third 150-megawatt facility planned for 2027.
Polaris Forge 2: Announced on August 18, 2025, Applied Digital broke ground in September 2025 on this $3 billion, 280-megawatt (MW) AI Factory near Harwood, North Dakota. Initial operations are slated for 2026, with full capacity expected by early 2027. These facilities are engineered for peak rack loads up to 120kW, significantly higher than industry averages, and feature proprietary waterless cooling and a Power Usage Effectiveness (PUE) of 1.18.
This aggressive expansion is driven by the insatiable global demand for AI compute power. The global AI data center market, valued at $13.62 billion in 2024, is projected to grow at a 28.3% Compound Annual Growth Rate (CAGR) through 2030. By 2025, an estimated 33% of global data center capacity will be dedicated to AI, reaching 70% by 2030. AI queries require 15 times the electricity of traditional queries, and racks now exceed 50 kilowatts, highlighting the need for specialized, high-density infrastructure like that being built by Applied Digital. Hyperscale cloud providers are investing hundreds of billions, with Microsoft allocating $80 billion and Amazon over $100 billion by 2025, underscoring the massive scale of this trend. The North Dakota location further amplifies this advantage: the state’s abundant low-cost energy, over 200 days of free cooling annually, and access to stranded power reduce operational costs by an estimated $2.7 billion over 30 years for a 100 MW facility compared to industry averages.
Also Read:
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While Applied Digital is well-positioned to capitalize on this boom with substantial contracts and ambitious projects, it faces competition from established players like Equinix (EQIX) and other AI infrastructure providers such as Vertiv (VRT). Investors are closely watching concrete milestones in its construction projects, diversification of its client base, and clear indications of improving margins and a pathway to sustained profitability, given the significant capital expenditures required for such rapid expansion.
