Applied Digital Signs \$5.2 Billion AI Data Center Lease with Hyperscaler, Expanding AI Factory Model
Key Highlights
- Major Lease Secured: Applied Digital (NASDAQ: APLD) has entered into a long-term lease agreement for 210 MW of critical IT load at its new Delta Forge 2 campus with a U.S.-based, high investment-grade hyperscaler.
- Financial Impact: The agreement represents approximately \$5.2 billion in base-term contracted revenue over a 15-year “take-or-pay” lease, with the potential to reach \$12.7 billion if all renewal options are exercised over a 30-year term.
- Portfolio Expansion: This deal brings Applied Digital’s total contracted lease revenue to approximately \$36 billion across five AI Factory campuses, with a potential to reach \$86 billion if all renewals are exercised.
- Customer Quality: Approximately 70% of the contracted revenue is backed by U.S.-based investment-grade hyperscalers, indicating strong, high-credit tenants.
- Operational Milestone: Delta Forge 2 is Applied Digital’s fifth AI Factory campus and marks the third long-term lease with the same U.S.-based hyperscaler customer.
- Infrastructure & Technology: The campus will use Applied Digital’s proprietary waterless cooling technology and high-density power infrastructure, designed for large-scale AI training and inference workloads.
- Community Impact: The project is expected to generate significant local employment and economic benefits during construction and operation, with initial operations targeted for Q1 2028.
Detailed Report
Applied Digital’s latest agreement underscores the company’s strategy of scaling its AI Factory franchise model, rather than simply building data centers. The lease at Delta Forge 2, located in a new southern state, signals strong ongoing demand from leading hyperscalers and validates Applied Digital’s approach of replicating a core team of design, construction, and operations experts across multiple campuses.
The 210 MW lease utilizes a “take-or-pay” structure, guaranteeing base-term revenue and ensuring cash flow predictability for at least 15 years. Should the customer exercise all renewal options, the deal could generate \$12.7 billion over 30 years. With this agreement, Applied Digital’s total contracted critical IT load now spans 1.4 GW, backed by 2.15 GW of grid-connected utility power. The company’s total contracted lease revenue has surged to \$36 billion, and could reach \$86 billion if all renewal options across the portfolio are exercised.
Shareholder-Relevant and Price Sensitive Information
- Largest Portfolio Expansion to Date: This lease is Applied Digital’s largest single agreement, both in terms of capacity and long-term revenue, and is a significant step in establishing the company as a leading provider in the AI and high-performance computing (HPC) data center market.
- Long-Term Revenue Visibility: The “take-or-pay” structure ensures stable, predictable cash flows, reducing risk and increasing the company’s appeal to investors seeking reliable long-term returns.
- High-Quality Customer Base: The involvement of a U.S.-based, high investment-grade hyperscaler (with three long-term leases in place) substantially reduces counterparty risk and enhances the company’s credit profile.
- Technology Differentiation: The integration of proprietary waterless cooling and high-density infrastructure positions Applied Digital as a technology leader in the rapidly growing AI data center segment.
- Community and Regulatory Benefits: Building in communities where large-scale infrastructure investment has a meaningful impact may facilitate smoother project approvals and strengthen Applied Digital’s license to operate.
- Execution Risk Remains: The company notes that actual revenue realization depends on customers exercising renewal options, timely completion of construction, and continued demand for AI and HPC services. Investors should be aware of these operational and market risks.
- Initial Operations Timeline: The Delta Forge 2 campus is expected to commence operations in Q1 2028, so the bulk of revenue from this lease will be realized over the medium- and long-term horizon.
About Applied Digital
Headquartered in Dallas, Texas, and founded in 2021, Applied Digital has rapidly established itself as a top-tier designer, builder, and operator of high-performance, sustainably engineered data centers for AI, cloud, networking, and blockchain workloads. The company was named Best Data Center in the Americas 2025 by Datacloud, and its AI Factory franchise model prioritizes economic opportunities in underserved communities.
Applied Digital’s documentary series, Behind the Build, offers insight into its collaborative approach with local communities.
Investor Relations & Further Information
- More information can be found at applieddigital.com.
- Media Contact: JSA (Jaymie Scotto & Associates), [email protected], (856) 264-7827
- Investor Contacts: Matt Glover or Ralf Esper, Gateway Group, Inc., [email protected], (949) 574-3860
Forward-Looking Statements & Risks
This report contains forward-looking statements involving substantial risk and uncertainty. Actual results may differ materially due to various factors, including but not limited to: timely construction completion, customer renewal of leases, ability to finance ongoing projects, changes in AI and HPC market demand, regulatory changes, and supply chain or operational disruptions. Applied Digital’s filings with the SEC, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, provide further details on risk factors.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Investors should conduct their own due diligence and consult their financial advisor before making any investment decisions.
