Applied Digital Corporation has signed two long-term lease agreements with CoreWeave to supply 250 megawatts of critical IT load for AI and high-performance computing infrastructure at its Ellendale, North Dakota data center.

The agreements are projected to generate around $7 billion in total revenue for Applied Digital over the 15-year lease term.

This partnership marks a significant turning point for Applied Digital as it transitions from a speculative model to a serious competitor in the AI infrastructure sector.

Wes Cummins, CEO of Applied Digital, emphasized that these leases position the company as a key infrastructure provider for the rapidly growing AI and HPC sectors.

Ellendale's favorable location, energy-efficient climate, and access to low-cost power enhance Applied Digital's position in the growing AI and high-performance computing infrastructure market.

The facility is engineered for rapid deployment and is strategically located to access abundant, low-cost energy, making it attractive to AI clients.

Applied Digital's expertise in building and operating advanced data centers positions it as a key player in the expanding AI and HPC markets.

The leases are crucial for providing stability and recurring revenue, especially as the company shifts focus towards AI infrastructure.

Following the announcement of these agreements, Applied Digital's shares surged by nearly 50%, reflecting strong investor confidence.

CoreWeave, backed by Nvidia, also saw its shares increase by approximately 8% after the announcement.

The contracts will provide 250 megawatts of power for CoreWeave's AI and high-performance computing infrastructure, with potential for future expansion.

This strategic shift from crypto farming to high-performance computing infrastructure could redefine Applied Digital's growth trajectory in the tech sector.