Applied Digital Completes AI Cloud Spinout Into New Nasdaq Firm ChronoScale

Applied Digital has completed the spinout of its cloud services business into a separately traded company, marking the latest move by a bitcoin mining-era infrastructure operator to reshape itself around the booming AI compute market.

The company said Tuesday that its previously announced transaction with EKSO Bionics Holdings has closed, resulting in the creation of a new Nasdaq-listed entity called ChronoScale Corporation, which began trading under the ticker CHRN on May 5.

As part of the transaction, Applied Digital contributed its cloud business into EKSO in exchange for about 138 million shares of ChronoScale stock, while also investing an additional $15.75 million in cash through a concurrent private placement. Following the deal, Applied Digital owns roughly 97% of ChronoScale’s outstanding shares.

The transaction effectively separates Applied Digital’s business into two distinct layers of the AI infrastructure stack: the long-term data center leasing and hosting business on one side, and the shorter-duration GPU cloud computing business on the other.

“This transaction reflects a deliberate step in how we structure the business,” Applied Digital CEO Wes Cummins said in the announcement. “Our data center hosting platform is built on long-duration contracts and predictable infrastructure returns, while the cloud compute layer operates on shorter cycles with a different risk profile.”

The structure highlights a growing divide emerging across the AI infrastructure market. Operators building large-scale powered campuses increasingly seek to position themselves as infrastructure landlords with stable contracted cash flows, while GPU cloud businesses — which rent compute capacity directly to customers — tend to carry higher margins but also more volatile utilization and pricing dynamics.

Applied Digital first disclosed plans for the separation in March, when it announced that its cloud services unit would merge into EKSO through a reverse merger structure. The deal allowed the cloud business to become publicly traded without pursuing a traditional IPO process.

The cloud segment being carved out operates GPU-based compute infrastructure for AI and high-performance computing workloads, including training and inference services. Unlike Applied Digital’s large-scale data center leasing business — where customers typically sign long-term colocation agreements tied to megawatt capacity — the cloud platform monetizes GPU compute more directly through shorter-term contracts and on-demand utilization.

The move also mirrors a broader restructuring trend among former bitcoin mining companies pursuing AI and HPC opportunities. HIVE Digital (NASDAQ: HIVE) separated its GPU cloud operations into a standalone subsidiary called Buzz HPC. Bit Digital (NASDAQ: BTBT) similarly carved out its HPC cloud business into a separate operating unit dubbed WhiteFiber as it expanded GPU leasing and AI compute offerings alongside its Ethereum staking business.