Applied Digital Secures $375M Loan to Fund HPC Expansion in North Dakota

Data center operator Applied Digital has finalized a $375 million loan agreement with Japanese financial firm SMBC to repay existing debt and fund the HPC expansion at its Ellendale campus in North Dakota.

Applied Digital, which also provides Bitcoin mining hosting for MARA in Ellendale, said on Wednesday that it used a portion of the loan to settle obligations under a senior secured note held by Macquarie Capital.

The remaining funds are earmarked for constructing the first two buildings at the Ellendale HPC Campus, a project aimed at serving hyperscale clients requiring advanced computing resources.

Applied Digital’s CFO Saidal Mohmand called the deal a “bridge” toward securing long-term project financing, which the company expects to pursue after signing a lease agreement with a major cloud services provider, commonly referred to as a hyperscaler.

The loan is structured as interim financing, with Applied Digital planning to replace it with permanent project-specific funding in the future. Northland Capital Markets advised the company on the deal, while legal teams from Milbank LLP, Lowenstein Sandler LLP, and Paul Hastings LLP represented Applied Digital and SMBC, respectively.

Applied Digital previously announced a partnership with Australian infrastructure asset manager Macquarie to secure up to $5 billion in funding to support its HPC growth. Macquarie will initially invest $900 million in Applied Digital’s Ellendale HPC Campus, with an option to contribute an additional $4.1 billion for future projects.

Applied Digital started its data center business initially to host GPUs for Ethereum mining and later pivoted to Bitcoin mining colocation and cloud computing hosting.