In a landmark 15-year lease agreement, Applied Digital (NASDAQ: APLD) has officially announced a partnership with a new U.S.-based, investment-grade hyperscaler tenant at its state-of-the-art Delta Forge 1 Factory campus.
This agreement isn’t just a win for the company; it’s a signal to the market about the demand for leading-edge AI Factory environments. With a total contracted value of approximately $7.5 billion, this lease further solidifies Applied Digital’s position at the forefront of the digital economy.
Expanding Applied’s AI Factory Footprint
Applied Digital has pioneered a repeatable, high-density model designed to solve the most pressing challenges in the AI era: power density and cooling. Delta Forge 1, located on a sprawling 500-acre site in a strategic southern state, represents the pinnacle of this vision.
The new lease covers 300 megawatts (MW) of critical IT load. This capacity is purpose-built to handle the intense thermal and power demands of modern High-Performance Computing (HPC) and AI workloads, including both large-scale model training and real-time inference.
Key Highlights of Delta Forge 1 AI Factory and New Hyperscaler Tenant:
- Massive Scale: 430 MW total capacity at the Delta Forge 1 campus.
- Long-Term Stability: A 15-year lease term w/new hyperscaler delivering high revenue visibility.
- Investment-Grade Tenant: The addition of a second U.S. investment-grade hyperscaler to the Applied Digital portfolio.
- Contracted Revenue: Total company contracted revenue now exceeds $23 billion.
Why Hyperscalers are Choosing Applied Digital
In the race to deploy AI at scale, traditional data centers often fall short of the required power density. Applied Digital bridges this gap by acting as a specialized AI Factory operator.
Wes Cummins, Chairman and CEO of Applied Digital, emphasized the company’s focus on execution:
“We remain focused on delivering operational AI capacity at scale. With this agreement, we are strengthening the overall quality and visibility of our contracted revenue.”
Wes Cummins, Chairman and CEO of Applied Digital
By integrating advanced cooling architectures and high-density power delivery, the Applied Digital Delta Forge 1 campus ensures that hyperscale tenants can operate their hardware at peak efficiency without the bottleneck of legacy infrastructure.
With initial operations at Delta Forge 1 expected to commence in mid-2027, Applied Digital is perfectly positioned to meet the tidal wave of demand for AI-ready data center space.
Future Growth and Financial Strength
The momentum at Delta Forge 1 is mirrored by broader growth across Applied Digital’s footprint. To support this rapid scaling, the company is expected to enter into an up to $300 million senior secured bridge facility to fund continued development of the 150 MW Building 3 data center located on its Polaris Forge 1 campus, and an up to $300 million senior secured revolving credit facility to fund pre-lease and post-lease development activities across Applied Digital’s platform, as well as general working capital needs and transaction expenses. These credit facilities are expected to be on customary market terms for facilities of this type, to close promptly, and be provided by a syndicate of bank lenders.
FAQ: Applied Digital and the Delta Forge 1 Project
What is an “AI Factory”? An AI Factory is a data center specifically engineered for artificial intelligence workloads. Unlike traditional data centers, AI Factories like Applied Digital’s campuses feature specialized cooling and ultra-high power density to support the GPUs required for AI training and inference.
What is the significance of the Delta Forge 1 lease? The lease with a high investment-grade hyperscaler adds $7.5 billion to Applied Digital’s contracted revenue. It validates the company’s business model and secures a long-term, 15-year commitment from a major player in the tech industry.
What is Delta Forge 1? Delta Forge 1 is a 430-MW campus spanning more than 500 acres in a southern U.S. state. It is designed to be a hub for large-scale AI and HPC infrastructure.
When will the new facility be operational? Initial operations at the Applied Digital Delta Forge 1 campus are anticipated to begin in mid-2027.
How does this impact Applied Digital’s financial standing? The deal brings the company’s total contracted revenue to over $23 billion. Furthermore, more than 50% of this revenue now comes from investment-grade customers, significantly de-risking the company’s long-term financial outlook.
