Macquarie is banking heavily on artificial intelligence-related investments.
The Australian financial institution has struck a deal with AI-infrastructure company Applied Digital to invest as much as $5B in preferred equity in the latter company’s data center pipeline.
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The Ellendale High Performance Computing data center campus Applied Digital is developing in North Dakota will get up to $900M of that investment, The Wall Street Journal reported. Macquarie also gets the first chance to invest the other $4.1B in upcoming projects over the next 30 months.
Dallas-based Applied Digital will give up 15% of its high-performance computing, or HPC, business to Macquarie as part of the deal.
“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,” Macquarie Asset Management Senior Managing Director Anton Moldan said in a statement. “The significant progress at the Ellendale HPC campus makes this a very compelling opportunity for us as well as for potential hyperscale customers.”
The Australian bank has invested heavily in data center projects around the world, including in AI-computing infrastructure company Lambda last year.
With the rise of AI, Applied Digital’s stock has increased by more than 40% over the last year and was up about 8% as of 12:30 p.m. EST. The company started in cryptocurrency mining as Applied Blockchain before switching to supplying computing power and changing its moniker in 2022.
The investment makes Applied Digital one of the fastest-growing HPC data center developers in the U.S. and positions it for further growth, Chairman and CEO Wes Cummins said.
“At today’s build costs, we will have a significant portion of the equity needed to construct over 2.0 GW of HPC data center capacity, including our Ellendale HPC Campus,” Cummins said in a statement.
The initial funds from Macquarie will be used to pay off debt Applied Digital accumulated as part of the development of the North Dakota data center, allowing the company to recover around $300M of its equity investment.
The AI boom has tech companies scrambling to build out the infrastructure needed to meet their plans.
Last week, Microsoft officials said the company would spend nearly $80B on data centers in 2025, a 44% increase over last year.
Dallas-based Provident Data Centers and Virginia-based American Real Estate Partners' PowerHouse Data Centers also announced a joint venture last week to build a hyperscale-focused campus on 768 acres in Dallas-Fort Worth. The multiphase project will be one of the largest data center campuses in the U.S. It will initially leverage about 500 megawatts of committed power, though Provident officials said it is slated to potentially scale up to 1.8 gigawatts at full build-out.
In other data center news this month, a $17B data center campus is being developed south of Atlanta by Georgia-based Atlas Development.
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