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Artificial intelligence (AI) chip leader Nvidia has joined other investors in a $160 million funding round for Applied Digital, a company that operates data centers and is building a business to lease computing power for AI applications. Investors in this deal include real-estate giant Related Companies, according to Applied Digital CEO Wes Cummins.
The funding is being provided through the acquisition of new shares in Applied Digital, a Nasdaq-listed firm with a valuation exceeding $500 million as of Wednesday’s market close. Applied Digital, which has been making a name for itself by building and leasing data center space, has more recently ventured into AI cloud computing, powered by Nvidia’s chips. Cummins highlighted that the company’s unique positioning as both a cloud operator and data center builder makes it particularly attractive to Nvidia.
The investment will support Applied Digital’s growth, including debt-financing deals for a major data center project in North Dakota. The funding will also help the company scale its AI cloud-computing business, a key component of its collaboration with Nvidia.
Nvidia has significantly increased its investment activity amid the AI boom, backing an ecosystem of companies using its chips. This strategic move provides Nvidia insights into the latest AI advancements. Just this week, Nvidia also participated in a $100 million funding round for Sakana AI, a Japanese AI research company.
As part of the Applied Digital deal, the company has agreed to issue approximately 49 million shares of its common stock at $3.24 per share, reflecting Tuesday’s closing price.