Cryptomine and HPC hosting firm Applied Digital has secured new financing to fund the build-out of a data center campus in Ellendale, North Dakota.

The company has secured a major leasing deal with an unnamed hyperscaler at the site.

Applied Blockchain.jpg
Applied's crypto hardware – Applied Blockchain

The company announced it has secured private financing from investment firm CIM Group.

APLD Holdings 2, LLC, a subsidiary of Applied, has issued a promissory note for commitments that total $125 million at close, with $15 million to be drawn now, and the remaining to be drawn subject to the satisfaction of certain conditions outlined in the note.

The note includes an accordion feature that allows for up to an additional $75 million of borrowings, subject to the mutual agreement. In total, this financing provides the company with up to $200 million to be used solely towards the build-out of the HPC campus in Ellendale.

“We believe this financing with CIM Group represents a transformative step in the company’s journey to secure both project financing and a long-term lease with a hyperscaler at our HPC Campus in Ellendale, ND,” said Wes Cummins, Applied Digital’s CEO. “With this financing, we believe we are able to keep our buildout plan on track and hope to finalize optimal terms for project financing concurrently with or shortly after the signing of a long-term lease.”

Applied Digital (formerly Applied Blockchain) originally broke ground on the Ellendale campus in Dickey County in September 2022. The site’s 180MW ELN01 is for hosting cryptomining hardware and largely leased to Marathon Digital; ELN02 – set to offer 100MW – is for HPC hosting.

While it does not mine its own Bitcoin, the company has traditionally hosted hardware on behalf of other cryptomining firms. As with many other cryptomine firms, the company is pivoting a portion of its footprint to host HPC & AI hardware amid massive demand for available capacity. Applied is also offering its own cloud services and has previously said it will host and offer access to Nvidia Blackwell GPUs.

In May the company entered into a private financing agreement with a single investor in which it issued a $42.1 million unsecured convertible debenture, again to fund the construction of the Ellendale campus. This followed a $50m loan in April and $20m in February.

Cummins added that the company now believes it has a “line of sight to finalize the build-out” of the campus.

He continued: “We distinguish ourselves not merely by owning clusters of GPUs, but also by designing and operating large-scale, top-tier data centers for world-class customers driving the AI revolution.”

“CIM Group is excited to support Applied Digital’s growth in cloud and hosting services for some of the world’s top companies,” said Avi Shemesh, co-founder and principal, CIM Group. “CIM will continue to invest in digital infrastructure, providing solutions to companies building the AI ecosystem.”

Simpson Thacher & Bartlett LLP acted as legal counsel to the lender. Milbank LLP and Lowenstein Sandler LLP acted as legal counsel to Applied.

In its Q3 2024 earnings results – issued April 2024 – the company posted a $2.3 million loss against $43.3 million in revenue, and cited “considerable challenges from the outages at Ellendale” during the quarter. The company has been suffering issues at the site since January.

Within the the earnings report, the company noted it had executed a letter of intent with an unnamed US-based hyperscaler for a 400MW capacity lease, inclusive of its current 100MW facility and two forthcoming buildings at Ellendale.

Cummins said the company has more than 600MW of future available hosting capacity at Ellendale.

Ellendale is the company’s second campus within North Dakota, following a 100MW cryptomine facility in Jamestown known as JMS01 that opened in 2022. A second building known as JMS02, announced in late 2022 and set to initially offer 5MW, is for HPC hosting.

A third, 200MW site in Garden City, Texas, went live last year. It was sold to Marathon Digital in March.

Another 200MW facility is being planned in Iowa.