Giant Revenue Deal: Applied Digital and CoreWeave seal a groundbreaking partnership
Artificial Intelligence Powerhouse, Applied Digital, Secures $7 Billion in Revenue Boost; Yet Maintains Sell Recommendation
Applied Digital (NASDAQ:APLD) has struck a game-changing deal with CoreWeave (CRWV), expected to rake in over $7 billion in revenue for Applied Digital over the next 15 years.
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This historic deal involves two 15-year lease agreements for a grand total of 250 megawatts (MW) of data center capacity at Applied Digital's Ellendale, North Dakota campus—a facility tailor-made for handling large-scale AI and high-performance computing (HPC) workloads.
CoreWeave, a cloud services firm backed by Nvidia, will be the campus's largest tenant, occupying more than 60% of its planned 400 MW capacity. The deal offers an option for CoreWeave to lease an additional 150 MW, potentially raising its capacity to a whopping 400 MW.
This partnership is a significant stride for both parties:- Applied Digital: By securing this deal, Applied Digital establishes itself as a leading provider of infrastructure for AI and HPC. With a projected revenue of around $7 billion over the lease term, the company reinforces its transformation into a data center real estate investment trust and boosts its standing among AI hyperscalers such as Meta and Microsoft[1][2][3].
- CoreWeave: This partnership supplies CoreWeave with the infrastructure needed to address escalating AI demands. Following the announcement, CoreWeave's stock has skyrocketed, hinting at the company's potential for expanded HPC capabilities[4].
The deal's potential connection to OpenAI is intriguing, as CoreWeave has a prior agreement with the firm—a connection that could benefit enormously from this infrastructure expansion[2]. So keep your eyes peeled for any future developments!
In light of the groundbreaking partnership between Applied Digital and CoreWeave, investments in the health sector might also benefit due to the increased revenues, potentially causing a ripple effect in the finance industry for Applied Digital. Additionally, the technological advancements resulting from this partnership, such as the improvements in large-scale AI and high-performance computing, could open up new opportunities for companies specializing in these areas, like Nvidia, which is a significant backer of CoreWeave.
