Australia’s Macquarie has announced an agreement to acquire a 15% stake in Applied Digital and commit up to $5 billion to support the company’s artificial intelligence data centers in response to the surging demand for AI technologies. The investment, valued at approximately $250 million based on Applied Digital’s closing price on Monday, marks a significant move by the Australian investment bank in the realm of AI.
Shares of Applied Digital experienced a notable uptick of around 20% prior to the market opening, driven by the news that Macquarie would emerge as the company’s largest shareholder, as per data provided by the London Stock Exchange Group (LSEG). The strategic partnership between Macquarie and Applied Digital underscores the escalating interest in AI infrastructure, particularly following the introduction of ChatGPT in late 2022.
In line with this collaboration, Macquarie’s asset management division has committed to injecting up to $900 million into a data center campus being developed by Applied Digital in North Dakota. This substantial investment underscores the growing importance of robust computing infrastructure to meet the evolving demands of AI model training and competition in the market.
Applied Digital, headquartered in Dallas, Texas, holds the prerogative to exercise the right of first refusal to invest an additional $4.1 billion in forthcoming company data centers over the span of 30 months, a move that solidifies its commitment to expanding its data center capabilities. According to Applied Digital’s Chief Executive, Wes Cummins, this partnership furnishes the company with the necessary equity to construct high-power-demand data centers, illustrating a forward-looking approach to infrastructure development.
The influx of new capital is poised to facilitate the repayment of existing debts incurred by Applied Digital in the construction of its North Dakota facilities, while also enabling the recovery of over $300 million in equity investments. This financial infusion positions Applied Digital for continued growth and operational enhancement, aligning with its strategic objectives in the competitive AI landscape.
The escalating investor interest in AI companies and data center providers is further underscored by Applied Digital’s robust performance, with its shares having surged by over threefold in the past two years. This trend reflects the market’s confidence in the potential of AI technologies to drive substantial growth opportunities and value creation for stakeholders.
Noteworthy industry players like Microsoft have also signaled their commitment to the AI domain, with plans to invest approximately $80 billion in AI data centers by fiscal year 2025 to meet the escalating computational requirements driven by AI advancements. This robust investment landscape underscores the critical role of data centers in supporting the burgeoning AI ecosystem and underscores the significant market potential driving such strategic decisions.
Applied Digital is slated to unveil its second-quarter financial results post-market closure on Tuesday, providing further insights into its operational performance and growth trajectory amid the evolving AI landscape. The collaboration with Macquarie and the infusion of substantial investment capital position Applied Digital for continued success and innovation in the burgeoning AI sector, underscoring the company’s strategic vision and commitment to driving technological advancements.
(Reporting by Za
