Applied Digital said on Monday that the two 15-year lease contracts were entered into with CoreWeave, a specialized cloud service provider supported by Nvidia, who will generate around $ 7 billion in income for the data center during the lease period.
Why it is important
The deal could prove to be an important lifeline for applied digitally, which stands for challenges in the data center hosting sector when the Real Estate Trust is transferred to a Real Estate Trust data center.
The shares of the company rose by 17% premarket -trading after the lease announcement.
Key quotes
“These lease contracts solidify the position of Applied Digital as an emerging supplier of infrastructure that is crucial for the next generation of artificial intelligence and high -quality computer,” said CEO of Applied Digital, Wes Cummins, in a statement.
“Because of these newly signed long -term rental contracts with CoreWeave, we take a step forward in our strategic expansion to advanced calculation infrastructure.”
Context
The rise of new cloud service providers, known as “Neoclouts” such as CoreWeave, focuses on renting NVIDia's highly sought after chips on software developers.
Leasing data center infrastructure from companies such as Applied Digital helps to reduce part of the financial burden to deliver AI-centric cloud services.
The shares of CoreWeave were almost 4%.
(Reporting by Arsheya Bajwa in Bengaluru; Edit by Tasim Zahid)
