Applied Digital receives $160 million investment from Nvidia to boost datacenter chip demand

Applied Digital, a Texas-based firm that describes itself as a “designer, builder, and operator of next-generation digital infrastructure” for HPC applications, has confirmed a multimillion-dollar investment from industry leader Nvidia.

The company announced that it had entered into an agreement with Nvidia worth $160 million.

With the capital, Applied Digital will bring its data center and GPU cloud solutions to market “at scale” in order to deliver a “proprietary, purpose-built, hyper-efficient platform for the world’s most advanced HPC and AI workloads.”

Nvidia invests $160m in Applied Digital

The Texas-based company is known for building water-cooled data centers optimized for AI workloads as well as for other cloud computing purposes.

Last quarter, Applied Digital reported a net loss of $64.8 million on a revenue of $43.7 million – it attributed much of the loss to expenses related to equipment and facilities that were not yet operational or generating revenue.

Applied Digital CEO Wes Cummins commented: “We’re proud of our strong relationship with Nvidia, and the confidence that both they and Related Companies, along with institutional investors, have placed in us. Our team is eager to bring to market the vital capacity and contiguous, liquid-cooled IT environments that are tailor-made for AI, HPC, and other accelerated compute workloads.”

The $160 million deal will see 49.4 million shares transfer to Nvidia ownership at a price of $3.24 per share – the last closing price on September 4. In the days following the announcement, share prices climbed to $5.59.

Nvidia has not commented on the deal.

However, the company’s investment may later form part of an investigation if the US DOJ decides to go ahead with an antitrust probe into the company’s alleged habits of stifling competition.

Previously, Nvidia affirmed: “Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them.”

More from TechRadar Pro

• These are the best AI writers
• We’ve rounded up a list of the best cloud hosting providers
• More subpoenas issued to Nvidia as US continues antitrust case