In a statement this week, the Nasdaq-listed Applied Digital confirmed it has entered into a US$5 billion perpetual preferred equity financing facility, with investment vehicles of funds managed by Macquarie Asset Management (MAM), for its high-performance computing (HPC) business conducted through its subsidiary APLD HPC Holdings.
Under the agreement, funds managed by MAM will invest up to US$900 million in the company’s Ellendale HPC data centre campus.
MAM also has a right of first refusal on all future HPC data centre project funding, up to an additional US$4.1 billion for 30 months following close.
Expounding on the specifics of the deal, the companies confirmed that the partnership will see APLD HPC Holdings issue perpetual preferred equity units and common equity units for an investment by MAM of US$2.25 million for each executed lease of 1 MW of capacity, to support the full 400 MW build-out of the Ellendale HPC Campus.
Under the deal, Macquarie will acquire a 15 per cent stake in APLDH, with Applied Digital set to retain an 85 per cent stake in both existing and future HPC assets.
“We are excited to partner with Applied Digital to build and scale its HPC data centre platform,” Anton Moldan, senior managing director of MAM, said in a statement.
“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,” Moldan said.
“The significant progress at the Ellendale HPC campus makes this a very compelling opportunity for us as well as for potential hyperscale customers.”
As an owner and manager of data centre platforms globally, Moldan said that MAM sees the partnership as an attractive opportunity to “help build an industry-leading HPC data centre company well positioned in these high growth segments of the market”.
Applied Digital chairman and chief executive Wes Cummins added: “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 centre owners, operators and developers in the United States.”
Cummins revealed that, at current build costs, the company will have a significant portion of the equity needed to construct over 2 gigawatt of HPC data capacity, including the HPC campus.
“With an 85 per cent ownership stake in both existing and future HPC assets and access to a project-level preferred equity financing facility sufficient to fund our HPC project pipeline, we believe we are poised for transformative progress,” Cummins said.
“We are excited to have MAM’s support as we establish ourselves as a leader in the Tier 3 data centre infrastructure sector, while continuing to develop and operate large-scale, state-of-the art data centres for world-class customers at the forefront of the AI revolution.”
Last year, a consortium of investors led by Blackstone purchased AirTrunk, the Asia-Pacific data centre platform, from MAM and the Public Sector Pension Investment Board (PSP Investments), for an implied enterprise value of over $24 billion.
Despite the divestment, the asset manager maintains a robust infrastructure portfolio – particularly in digital infrastructure.
In its 2025 outlook, MAM lead Ben Way said that generative artificial intelligence (AI) as a theme represents a “material increase” in demand for server capacity globally, which the company has seen firsthand through demand for data centre capacity across its portfolios.
“This growth is incremental to the demand for data fuelled by the rollout of 5G, which led wireless data consumption in the US to exceed 100 trillion megabytes in 2023. This rapid rise in demand for data has significant implications for both power grids and renewable power, driving convergence between three of our key investment themes,” Way said.
The report reads: “While investment opportunities exist across the digital infrastructure landscape, the tailwinds for data centres are particularly strong on the back of the rise in generative AI.
“Generative AI increases bandwidth requirements between data centres, resulting in a greater need for fibre network buildout. With financing conditions expected to improve in 2025, we believe the digital infrastructure sector is poised for a dynamic year.”
