Australia's Macquarie to invest up to $5 billion in Applied Digital data centers

Australia's Macquarie on Tuesday agreed to take a 15 per cent stake in Applied Digital's high-performance computing business and invest up to $5 billion in the company's artificial intelligence data centers amid booming AI demand.

Shares of Applied Digital rose about 20 per cent before the opening bell.

Since the launch of ChatGPT in late 2022, providers of computing infrastructure like Applied Digital have been seeing heavy investment from companies looking to train their own AI models and get ahead of competitors.

Macquarie's asset management arm has agreed to invest up to $900 million in a data center campus that Applied Digital is developing in North Dakota.

Dallas, Texas-based Applied Digital also has the right of first refusal to invest an additional $4.1 billion in future company data centers for 30 months, the company said.

Applied Digital Chief Executive Wes Cummins said the deal provides the company with enough equity to construct data centers with high power demands.

The new funding will be used to repay debt Applied Digital took on to build the facilities in North Dakota and will allow it to recover over $300 million of its equity investment in them, the firm said.

Applied Digital's shares have more than tripled in the past two years as investors bet on AI firms and data center providers to bring strong levels of growth.

Microsoft said earlier this month it would invest around $80 billion in AI data centers in fiscal 2025 to meet growing computational needs.

Applied Digital is set to report its second-quarter results on Tuesday after the markets close. (This story has been corrected to say that Macquarie will take a stake in Applied Digital's high-performance computing unit, not the whole company, in paragraph 1; and to remove the reference to valuation of 15 per cent stake in Applied Digital and Macquarie's shareholding in the company)