Applied Digital says in advanced lease talks with ‘investment-grade hyperscaler’

Wes Cummins of Applied Digital (APLD) wrote in a letter to stockholders shared in a regulatory filing after the close on Friday: “Applied Digital has made remarkable strides over the past year, solidifying our leadership in artificial intelligence infrastructure. As pioneers in transitioning from crypto-focused facilities to AI-optimized data centers, also known as AI Factories, our early strategic pivot has built what we firmly believe is a durable competitive edge. By securing abundant power, strategic land, and critical supply chain resources and assembling world-class construction teams in low-cost, climate-advantaged regions, we have created a unique, full-stack data center model that we believe is difficult to replicate and is intended to enable us to monetize our assets at a premium. A defining achievement this year was securing three 15-year leases with CoreWeave for approximately $11 billion in anticipated aggregate rental revenue over the term for 400 megawatts at our Polaris Forge 1 campus in Ellendale, North Dakota, with options for three additional five-year renewals. This deal underscores market confidence in our ability to deliver scalable, high-performance AI infrastructure with unmatched speed and reliability. Polaris Forge 1, designed to scale to 1 gigawatt, will see its first 100-megawatt facility operational in Q4 2025, with additional 150-megawatt facilities following in 2026 and 2027. We believe these long-term leases will provide a stable cash flow which is expected to fund sustained growth. Building on this success, we are seeking to transform the Dakotas into a leading destination for AI infrastructure. In September 2025, we broke ground on Polaris Forge 2, a $3 billion, AI Factory with 200 megawatts of critical IT load near Harwood, North Dakota, with capacity for further expansion. Set for initial operations in 2026 and full capacity in 2027, this campus has attracted strong interest from a U.S.-based, investment-grade hyperscaler, with whom we are in advanced negotiations. Securing this second major customer will diversify our client base, validate our construction expertise, and reinforce our leadership in AI infrastructure. Our Crypto Data Center Hosting business remains robust, with our 106-megawatt in Jamestown and our 180-megawatt Ellendale facility operating at full capacity. Meanwhile, we continue to explore strategic alternatives for our Cloud Services business in order to allow us to sharpen our focus on core data center operations and maximize long-term stockholder value. Looking ahead, we aim to achieve $1 billion in Net Operating Income within five years. With a multi-gigawatt pipeline, accepted design and recognized construction expertise, strong hyperscaler relationships, and accelerated 12- to 14-month build timelines, supported by commitments from leading industry investors, we believe we are well-positioned to meet this goal. We remain deeply committed to sustainability and to creating economic opportunities in underserved communities. Our Polaris Forge campuses employ hundreds of staff and contractors while fostering local partnerships and workforce development. Recognized as the Best Data Center in the Americas 2025 by Datacloud, our innovative designs feature closed-loop, waterless, direct-to-chip cooling systems, achieving a projected Power Usage Effectiveness of 1.18 with near-zero water consumption. These efficiencies are expected to deliver environmental benefits and significant cost savings-potentially $2.7 billion over 30 years for a 100-megawatt facility compared to traditional data centers. Looking forward, the opportunity before us is extraordinary. AI Factories require orders of magnitude more power density and efficiency than traditional facilities. With abundant land and energy, and an accepted design and construction model, we believe Applied Digital is uniquely positioned to deliver these solutions at unmatched scale and efficiency. By mastering the most challenging and enduring aspects of AI infrastructure, we feel we are set to capitalize on this generational opportunity. On behalf of our Board and employees, thank you for your continued trust and support. Together, we are building the backbone of the Intelligence Age, seeking to drive long-term value for our stockholders, customers, and communities.”