Applied Digital Secures $160 Million in Funding

Data center operator Applied Digital (APLD) raised $160 million in a recent funding round, as reported by the Wall Street Journal on Thursday. CEO Wes Cummins announced that Nvidia (NASDAQ: NVDA) and real estate firm Related Companies are among the investors participating in this round.

The funds will be generated through a new share offering from the Nasdaq-listed firm, which had a market valuation exceeding $500 million as of Wednesday’s closing price.

Applied Digital’s shares soared over 50% during Thursday premarket trading.

The company specializes in constructing and leasing data center space and has recently launched an AI cloud-computing business powered by Nvidia’s chips. Cummins noted, “We have been doing a lot with Nvidia, and I think we’re unique in that we have both the cloud aspect and the data center build-out. I think both are important to them.”

The funds raised will help support the company’s expansion and enable planned debt-financing initiatives. Applied Digital is looking to secure debt financing for a major data center project in North Dakota, along with growing its AI cloud-computing operations.

Nvidia has been increasing its investments as the AI sector continues to prosper, supporting companies utilizing its technology while gaining insights into the latest advancements in AI. The company has tripled its investment activity last year compared to the previous year.

Several firms in the AI cloud-computing realm, like CoreWeave, have also attracted investments from Nvidia. CoreWeave recently reached a remarkable valuation of $19 billion during a funding round earlier this year.

In another recent transaction, Nvidia participated in a $100 million funding round for Sakana AI, a Japanese AI research firm.

As part of the Applied Digital agreement, the company will issue around 49 million shares of its common stock at $3.24 per share, set at Tuesday’s closing price.