Macquarie to invest $5B in Applied Digital AI data centers

Macquarie Asset Management has committed up to $5 billion in funding to Applied Digital Corporation to accelerate the development of high-performance computing data centers, with a primary focus on the 400 MW Ellendale HPC Campus.

Deal structure and immediate impact: The financing agreement centers on a strategic partnership between Applied Digital and Macquarie Asset Management (MAM) that could reshape the high-performance computing landscape.

• MAM will invest $2.25 million per megawatt of leased capacity through Applied Digital’s subsidiary APLD HPC Holdings LLC
• The initial funding could provide up to $900 million for the Ellendale project’s complete build-out
• The agreement includes provisions to repay $180 million in bridge debt and recover $300 million in equity investments

Key financial terms: The financing structure combines preferred equity with significant future funding commitments.

• The preferred equity carries a 12.75% annual dividend and guarantees a minimum 1.80x capital return
• MAM will receive 15% of APLDH’s fully diluted common equity at issuance
• The agreement includes a 30-month right of first refusal for MAM on $4.1 billion in future data center funding
• APLDH can redeem MAM’s equity position after the fifth anniversary of closing

Strategic expansion plans: Applied Digital aims to establish itself as a leading player in the high-performance computing infrastructure sector.

• The funding could support the construction of over 2.0 GW of HPC data center capacity
• Applied Digital will maintain an 85% ownership stake in both existing and future HPC assets
• The company is positioning itself specifically in Tier 3 data center infrastructure
• The development focuses on markets with strategic power access across North America

Critical conditions: The deal’s execution depends on specific market achievements and customer commitments.

• Closing requires securing a 100 MW lease with a hyperscale customer for the Ellendale HPC facility
• MAM will provide an initial $225 million investment
• Additional funding releases will be tied to securing further lease commitments
• The company must demonstrate capacity to support demanding AI and HPC applications at scale

Market positioning and competitive advantage: The unique attributes of Applied Digital’s strategy and infrastructure position the company for significant growth in the evolving AI landscape.

Rather than treating this simply as a financing deal, the partnership between Applied Digital and MAM represents a strategic positioning in the rapidly growing high-performance computing sector, particularly as AI workloads drive unprecedented demand for specialized data center infrastructure. The success of this venture will likely depend on Applied Digital’s ability to execute on its technical vision while securing major hyperscale customers in an increasingly competitive market.