- Applied Digital already counts CoreWeave and one unnamed hyperscaler among its customers
- CEO Wes Cummins told Fierce it is in negotiations with two more hyperscale customers
- He added the company is carefully designing its contracts to help insulate it against any AI bubble
In the sea of data center customers, there are big fish and then there are whales. Applied Digital has already caught one of each and is trying to reel in two more giants before the year is out, CEO Wes Cummins told Fierce.
Thus far in 2025, the company has struck high-profile, high-dollar lease deals with CoreWeave and an unnamed hyperscale customer for a combined 600 MW worth of capacity at the two data center campuses it is building in North Dakota. Together, these contracts are worth $16 billion over 15 years.
But Cummins said Applied Digital still has its line in the water and is negotiating with two other hyperscale customers for leases of additional forthcoming facilities in North and South Dakota.
Cummins declined to name the companies it is working with, but noted it views only five companies as “investment-grade hyperscalers”: Amazon, Microsoft, Meta, Google and Oracle. If it can land the deals currently under negotiation, Applied Digital will count three of these five whales as its customers.
That means its capacity pipeline could soon be massive.
“I have two campuses that can both go to a gigawatt. So that gives me a pipeline of just building out two gigawatts at those two campuses,” Cummins said of the facilities occupied by CoreWeave and its existing hyperscale customer. “If I can add two other campuses, then I have a much clearer pipeline…to go to four gigawatts.”
If it’s not already clear, that would be a huge boon for the company’s revenue.
Assuming Applied Digital is able to secure a similar price per watt to its existing contracts and scales to 4 GW, that would leave it with contracts with a lifetime value of roughly $100 billion.
Sidestepping the AI bubble
If you’re thinking that sounds a bit like bubble territory, you’re not alone. But Cummins said the company’s contracts are designed to insulate it from rough seas.
“This is super important and we focus on this when we do our lease contracting: If they cancel, they owe us the entire 15 years of lease payments,” Cummins explained. “So even if they change their mind, the contract is 15 years of lease payments. That’s the number one protection.”
He added that Applied Digital is carefully selecting the deals it pursues and isn’t giving into AI FOMO.
Some other companies have inked deals to lease out GPU or other compute capacity to hyperscale customers. But such deals can shift performance risks away from the customer and onto the data center operator. They can also carry a shorter lease term.
“I don’t want those deals,” Cummins said.
He added the kinds of deals Applied Digital is looking for are long-term, full facility leases. In these kinds of arrangements, the customer brings – and is responsible for – their own compute kit.
The CEO said Applied Digital also doesn’t want to overcommit itself. Why? Because while signing big deals is fun, execution is hard.
Cummins thinks there are “going to be a lot of tears in 2026 when schedules aren’t met.”
He’s not wrong. CoreWeave’s stock price dropped sharply this week after the company lowered its full year 2025 guidance due to vendor delays that kept it from delivering contracted capacity to a key customer on time in Q3.
Capex conundrum
That said, building data centers isn’t cheap, and investors this week appeared spooked by Applied Digital’s decision to take out $2.35 billion in debt to help fund continued construction of its facilities.
But Cummins noted the debt is being taken out against the “contracted revenue that is very profitable for the company” and argued investors should actually be happy that it can fund its projects using debt and not equity capital, which would be dilutive to investor shares.
In its fiscal Q1 2026 (ended August 31, 2025), Applied Digital had a net loss of $27.8 million on revenue of $64.2 million.
Asked when the company will turn profitable, Cummins said next year. He noted Applied Digital will begin generating lease revenue from its first building in North Dakota in its February 2026 quarter.
“When that second building gets energized, we should be well into the black,” he concluded. “We have a great business right now. If I never sign another megawatt with anyone, I have a business that’s going to go to over $700 million of net operating income per year.”