Applied Digital Corporation (Nasdaq: APLD) today announced a significant financial milestone with a $160 million private placement financing, marking a strategic expansion in its high-performance computing (HPC) capabilities. This investment round included contributions from NVIDIA and Related Companies, one of the largest privately-owned real estate and infrastructure developers.
Strategic Financial Boost
The private placement is priced at market value, featuring the issuance of 49,382,720 shares at $3.24 each, matching the closing price on September 4, 2024. This funding initiative is set to bolster Applied Digital’s operational and developmental strategies, primarily focusing on the scalability of data center capacities and advanced GPU cloud solutions. This move underscores the company’s ambition to remain at the forefront of the accelerating compute space, leveraging cutting-edge technologies such as closed-loop liquid cooling systems to optimize efficiency and performance.
Expanding Capabilities
Applied Digital is set to enhance its digital infrastructure through significant projects, including the construction of one of the world’s largest data centers and an additional development of 300MW of data center capacity. These initiatives are supported by a robust pipeline of immediately available stranded power and a deep bench of hyperscale talent, positioning the company to handle the world’s most demanding HPC and AI workloads effectively.
Strong Industry Relationships
The company’s status as a Preferred NVIDIA Cloud Partner highlights its pivotal role in the data center and cloud computing industries, ensuring it stays aligned with GPU innovations that drive the sector forward. Wes Cummins, CEO and Chairman of Applied Digital, stated, “Our ability to identify market demands has been key to our growth, and this funding represents a vote of confidence from our partners in our capacity to lead the HPC and AI markets into the future.”
Legal and Market Framework
This financial exercise is subject to customary closing conditions, with additional details to be disclosed in an upcoming Form 8-K filing with the Securities and Exchange Commission. It’s important to note that the securities involved have not been registered under the Securities Act of 1933 and will be subject to specific regulatory requirements for sales and offerings.
Industry and Investor Outlook
This strategic investment is anticipated to significantly advance Applied Digital’s market position, enabling the delivery of next-generation computing solutions tailored for AI, HPC, and other accelerated computing needs. The market has responded positively to this news, with Applied Digital’s stock seeing a notable increase, closing up 65.74% on the day of the announcement.
Goldman Sachs & Co. LLC acted as the exclusive placement agent for the transaction, with legal advisory from Lowenstein Sandler LLP, ensuring a smooth and compliant financial process.
About Applied Digital
Applied Digital designs, develops, and operates cutting-edge data centers across North America. The company’s commitment to innovation extends to its AI Cloud offering, which provides large-scale accelerated computing solutions to meet the growing demands of the HPC industry. For more information, visit Applied Digital’s website and follow their updates on X (formerly Twitter) at @APLDdigital.
This pivotal phase in Applied Digital’s growth trajectory illustrates its continued leadership in providing critical infrastructure for the evolving digital economy, promising enhanced shareholder value and technological advancements in the high-performance computing space.
