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Jason Zhang's Applied Digital Signs $15 Bil. AI Deal with Nvidia-Backed Coreweave
By Reuters | 02 Jun, 2025
The deal gives Applied Digital access to CoreWeave's Nvidia GPU-stocked AI cloud capabilities essential for its transition into a data center real estate investment trust.
Applied Digital said on Monday it has entered into two 15-year leases with CoreWeave, a specialized cloud services provider backed by Nvidia, which will generate about $7 billion in revenue for the data center operator over the lease period.
WHY IT'S IMPORTANT
The deal could prove to be a major lifeline for Applied Digital, which has been facing challenges in the data center hosting sector as it transitions into a data center real estate investment trust.
Applied Digital was co-founded by Jason Zhang who serves as its Chief Strategy Officer of Applied Digital. Zhang is a seasoned technology sector investor who in 2019 founded Valuefinder, a firm that advises and invests in technology companies.
From 2017 to 2019 Zhang was an investment analyst at Sequoia Capital. His focus was on AI, blockchain, digital infrastructure, enterprise software, consumer products, and hardware. From 2015 to 2017 Zhang analyzed technology investments at MSD Capital, Michael Dell’s family office.
Zhang earned a BA in Economics from Harvard University in 2015. He is seen as the strategic thinker behind Applied Digital’s growth and innovation.
The company's shares surged by 17% in premarket trading following the lease announcement.
KEY QUOTES
"These leases solidify Applied Digital's position as an emerging provider of infrastructure critical to the next generation of artificial intelligence and high-performance computing,” CEO of Applied Digital, Wes Cummins, said in a statement.
"Through these newly signed long-term leases with CoreWeave, we are taking a step forward in our strategic expansion into advanced compute infrastructure."
CONTEXT
The emergence of new cloud service providers, known as "neoclouds" like CoreWeave, focuses on renting Nvidia's highly sought-after chips to software developers.
Leasing data center infrastructure from companies like Applied Digital helps reduce some of the financial burden of providing AI-centric cloud services.
CoreWeave's shares were up close to 4%.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid and Goldsea Staff)
Applied Digital was co-founded by Jason Zhang who serves as its Chief Strategy Officer of Applied Digital. Zhang is a seasoned technology sector investor who in 2019 founded Valuefinder, a firm that advises and invests in technology companies.
Applied Digital builds data centers capable of providing the power requirements of AI server farms.
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