Macquarie to Invest Up to $5 Billion in Applied Digital's AI Data Centers

Macquarie's Major Investment in Applied Digital

Macquarie Asset Management (MAM) has entered into an agreement with Applied Digital Corporation to provide funding of up to $5 billion for high-performance computing (HPC) growth 1

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. This significant investment aims to accelerate the development of Applied Digital's data center projects, with a particular focus on the 400 MW Ellendale HPC Campus in North Dakota 1

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Investment Structure and Terms

The investment structure involves Applied Digital's subsidiary, APLD HPC Holdings LLC (APLDH), issuing equity units to MAM. Key points of the agreement include:

• MAM will commit $2.25 million per megawatt of leased capacity
• Up to $900 million could be provided for the full 400 MW build-out of the Ellendale project
• Approximately $180 million in bridge debt will be repaid
• $300 million in equity investments will be recovered
• Operational and transaction costs will be funded
• MAM holds a right of first refusal on $4.1 billion of Applied Digital's future data center funding over a 30-month period 1

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Strategic Implications for Applied Digital

This deal positions Applied Digital for significant growth in the HPC and AI infrastructure sector. Wes Cummins, Chairman and CEO of Applied Digital, stated:

"We believe this expanded relationship with MAM positions Applied Digital for significant growth in the industry, establishing Applied Digital as one of the fastest-growing HPC data center owners, operators and developers in the United States." 1

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The company will retain an 85% ownership stake in both existing and future HPC assets, with access to project-level preferred equity financing sufficient to fund their HPC project pipeline 1

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AI Infrastructure and Market Trends

The investment reflects the growing demand for AI infrastructure and the willingness of venture capitalists and private equity firms to invest heavily in GPU-packed data centers. Applied Digital, like other players in the field such as CoreWeave and Lambda, offers datacenter and cloud services powered by Nvidia's chips 2

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Macquarie's Perspective

Anton Moldan, Senior Managing Director of Macquarie Asset Management, expressed confidence in the investment:

"Applied Digital has a differentiated strategy with access to a unique near-term power portfolio across North America in markets attractive for computing needs which address the most demanding AI and other HPC applications at scale." 1

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Industry Context and Future Outlook

The AI infrastructure market is experiencing rapid growth, with significant investments being made across the industry. For instance:

• CoreWeave reportedly raised $9.9 billion in funding and debt financing in 2024 alone
• Blackstone announced plans to invest £10 billion (US$12 billion) in an AI datacenter in northeast England 2

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These investments underscore the perceived potential for high returns in the AI infrastructure sector, with estimates suggesting that a $1.5 billion investment in infrastructure could yield about $5.27 billion in revenues within four years 2

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Closing Conditions and Next Steps

The deal's closing conditions include securing a lease with a hyperscaler for 100 MW of the Ellendale HPC data center. MAM will provide an initial $225 million, with additional funding contingent on further lease executions 1

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. This arrangement highlights the importance of securing major clients in the competitive AI infrastructure landscape.