Applied Digital Locks $3.45B to Scale AI Data Centers

The Daily Dig:

Applied Digital closed its fiscal second quarter after securing $3.45 billion in layered financing to accelerate its AI focused data center expansion. The Dallas based developer ended the quarter with $2.3 billion in cash against $2.6 billion in total debt. The capital structure includes a $2.35 billion private offering of senior secured notes, a $900 million preferred equity facility with Macquarie Asset Management, and a $100 million development loan facility intended to fund early construction activities and pre-lease execution.

The financing is directly tied to Applied Digital’s growth strategy in power rich markets, led by the Dakotas. The company holds leases with two hyperscale customers totaling 600 megawatts of planned capacity in the region. Management has stated those leases could represent approximately $16 billion in prospective long-term revenue if fully built out and occupied. CEO Wes Cummins also confirmed the company is in advanced discussions to expand into additional sites across the Dakotas and select southern U.S. markets.

Snapshot:

• Company: Applied Digital

• Total Financing Secured: $3.45 billion

• Senior Secured Notes: $2.35 billion

• Preferred Equity Facility: $900 million

• Development Loan Facility: $100 million

• Quarter-End Cash: $2.3 billion

• Quarter-End Debt: $2.6 billion

• Leased Capacity: 600 megawatts with two hyperscale customers

• Primary Markets: Dakotas and select southern U.S. regions

TheJobWalk Thoughts:

This is textbook hyperscale infrastructure finance. Lock the power, lock the customer, then raise enough capital to survive long construction timelines. If those Dakota megawatts start turning into site work, a lot of contractors are about to learn some new zip codes.