“Applied Digital has solidified its position in the booming AI infrastructure sector through a major lease agreement with Oracle for its Polaris Forge 2 campus in North Dakota, backed by a $2.15 billion senior secured notes offering and a strategic 1.2-gigawatt power generation arrangement. This combination of long-term hyperscaler commitment, substantial financing, and dedicated power supply underpins the company’s aggressive expansion, transforming it from a former crypto-focused player into a key provider of high-performance computing facilities tailored for artificial intelligence workloads.”
Applied Digital’s Strategic Pivot Fuels AI Infrastructure Expansion
Applied Digital Corporation continues to capitalize on the surging demand for AI computing capacity, with its latest developments centering on the Polaris Forge 2 campus near Harwood, North Dakota. The company has confirmed Oracle as the anchor tenant for this facility through a long-term lease that provides critical visibility into future revenue streams. This agreement, initially announced as involving a U.S.-based investment-grade hyperscaler and valued at approximately $5 billion over a 15-year term, covers 200 megawatts (MW) of critical IT load specifically engineered for AI and high-performance computing (HPC) needs.
The Oracle partnership marks a significant milestone, as it brings one of the major cloud providers into Applied Digital’s ecosystem alongside existing deals with other hyperscalers like CoreWeave. With Oracle’s commitment, the Polaris Forge 2 site—designed for up to 1 gigawatt (GW) of total capacity—gains strong credibility. The tenant also holds a first right of refusal for an additional 800 MW, positioning Applied Digital to scale rapidly as AI adoption accelerates across industries.
To support the buildout of this ambitious project, Applied Digital recently priced a $2.15 billion offering of 6.750% senior secured notes due 2031. Issued at 98% of par, the proceeds are earmarked directly for funding construction and related costs at Polaris Forge 2. This financing round reflects robust investor appetite for AI-related infrastructure debt, even in a market facing broader uncertainties around interest rates and energy costs. The notes provide the capital necessary to advance the campus toward operational status, with portions expected to come online in the coming periods.
Power availability remains one of the most critical bottlenecks in the AI data center race, where massive GPU clusters demand reliable, high-volume electricity. Applied Digital has addressed this through a guarantee tied to a $2.4 billion, 1.2 GW power generation facility developed by Base Electron, Inc. Under the arrangement, Applied Digital unconditionally backs certain obligations of Base Electron in a design-build agreement with partners like Babcock & Wilcox. In exchange, the company receives a 10% equity stake in Base Electron, aligning interests for long-term power stability.
This power deal ensures dedicated capacity for the Polaris Forge 2 campus and potentially other sites, mitigating risks associated with grid constraints that have hampered many data center projects nationwide. By securing off-grid or dedicated generation, Applied Digital positions itself to deliver the consistent, high-density power required for next-generation AI training and inference operations.
The company’s North Dakota footprint now features multiple campuses with substantial contracted capacity. Earlier leases, including a major agreement with CoreWeave for 250 MW at the Ellendale site (generating an estimated $7 billion over 15 years), complement the Oracle deal. Combined, these arrangements bring total leased capacity across North Dakota campuses to around 600 MW, with significant expansion potential.
Applied Digital’s shift from its earlier focus on blockchain and high-performance computing for crypto mining to purpose-built AI factories has been methodical. The company emphasizes sustainable engineering, efficient cooling, and rapid deployment to meet hyperscaler timelines. Leadership has highlighted the ability to deliver large-scale capacity faster than many competitors, a key differentiator in a market where time-to-market for AI infrastructure can determine competitive edges.
Financially, the strategy involves balancing heavy upfront capital expenditures with predictable, long-term lease revenues. Contracted deals provide multi-year visibility, supporting debt servicing and further development. Recent analyst commentary notes the company’s aggressive pipeline, including advanced discussions for additional sites and capacities potentially reaching hundreds of megawatts more.
Challenges persist, including execution risks in large-scale construction, power project dependencies, and ongoing net losses as investments ramp up. However, the Oracle lease and associated financing demonstrate market confidence in Applied Digital’s ability to execute amid the AI boom.
Key Contracted Capacities and Revenue Projections
Polaris Forge 2 (Oracle lease): 200 MW committed, ~$5 billion over 15 years; first right of refusal for additional 800 MW.
Ellendale Campus (CoreWeave): 250 MW, ~$7 billion over 15 years.
Total North Dakota leased: ~600 MW across major hyperscalers.
Polaris Forge 2 power support: Tied to 1.2 GW generation project.
Financing Overview
$2.15 billion senior secured notes (6.750% due 2031) priced to fund Polaris Forge 2.
Power guarantee: Backing for $2.4 billion facility, with equity participation.
This integrated approach—combining elite tenant partnerships, targeted financing, and proactive power solutions—directly ties Applied Digital’s growth trajectory to the expanding needs of AI leaders like Oracle.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial recommendations, or a solicitation to buy or sell securities. Investors should conduct their own research and consult professionals before making decisions.