Applied Digital (APLD, Financial) just signed what might be the most important deal in its history. The company announced two 15-year lease agreements with AI cloud specialist CoreWeave (CRWV, Financial), totaling 250 megawatts of compute capacity at its Ellendale, North Dakota campus. If all goes to plan, this deal could generate approximately $7 billion in revenue over the lease term—averaging nearly $467 million annually. The stock popped nearly 50% at 12.21pm after the news broke. This isn't just a revenue headline; it's a potential inflection point. For a company navigating a strategic shift into AI infrastructure, locking in a long-duration client like CoreWeave could be exactly the kind of anchor it needs to prove its long-term viability.
The rollout isn't instant, but the plan is in motion. The first 100MW facility is expected to go live in Q4 2025, followed by another 150MW in mid-2026. CoreWeave also has an option to tack on an additional 150MW—bringing the potential total to 400MW out of the site's planned 1-gigawatt capacity. The location checks all the boxes: fast build timelines, cheap and abundant power, and a cool climate that lowers operating costs. For hyperscalers racing to build infrastructure that can handle the rising load from AI models, these fundamentals matter. And CoreWeave's commitment suggests they believe Applied Digital can deliver where it counts.
This move could help shift investor perception of Applied Digital from “speculative infrastructure play” to “serious contender in the AI arms race.” It also places the company squarely in the crosshairs of a broader trend: smaller, agile players providing hyperscalers with purpose-built infrastructure tailored for generative AI. The long-term leases offer visibility into recurring revenue and de-risk the business model—especially for a firm that's been heavily dependent on transitional hosting services. The challenge now? Execution. If Applied can stick the landing on this multi-phase buildout, it might just become a new name to watch in the AI infrastructure space.
