Applied Digital (NASDAQ:APLD) announced a lease agreement valued at approximately $5 billion with a US-based investment-grade hyperscaler for its upcoming Polaris Forge 2 Campus near Harwood, North Dakota.
The 15-year agreement covers 200 megawatts (MW) of critical IT capacity designed to support artificial intelligence (AI) and high-performance computing (HPC) infrastructure.
The tenant also holds a first right of refusal to expand by up to 800 MW, representing the full 1-gigawatt (GW) potential of the Polaris Forge 2 site.
With this latest deal, Applied Digital’s total leased capacity with two of the world’s largest hyperscalers across its Polaris Forge 1 and 2 campuses has reached 600 MW.
Polaris Forge 2 spans more than 900 acres and is being built with sustainability goals, including a targeted power usage effectiveness (PUE) of 1.18 and near-zero water use.
Construction is expected to begin in 2026, with phased capacity coming online through 2027.
“The real constraint in this industry is execution, and our team continues to prove that large-scale, next-generation data centers can be designed, financed, and brought online faster and more efficiently than anyone thought possible,” Applied Digital CEO Wes Cummins said in a statement.
“We believe Polaris Forge 2 builds on that momentum, reflecting the strength of our partnerships and the speed at which we’re reshaping the AI infrastructure landscape.”
Analysts at Wedbush believe the deal supports their bullish view of the AI sector.
“We see the plethora of newsflow around hyperscale deals with 3rd parties to secure incremental capacity as signaling the robust nature of current AI demand with benefits spanning the breadth of our hardware coverage,” the analysts wrote.
The long-term investment appeared to spook investors, with shares of Applied Digital falling almost 8% on the announcement.