Applied Digital Corp., a Nasdaq-listed company that builds data centers for cloud providers and other organizations, has raised $160 million through a private placement.

A private placement is a transaction in which shares are issued directly to investors rather than via a stock exchange. Applied Digital said in today’s announcement of the deal that it sold 49.38 million shares for $3.24 apiece, its Tuesday closing price. The buyers included Nvidia Corp. and Related Companies LP, a major real-estate developer.

Dallas-based Applied Digital builds data centers optimized for artificial intelligence workloads. The company doesn’t equip its facilities with fans, the most common approach to regulating server temperatures, but rather uses liquid cooling equipment. The latter technology is widely used in AI clusters because it dissipates heat more efficiently than air.

Besides cooling gear, Applied Digital also equips the data centers it builds for customers with networking hardware and related components. The company says that several of the systems in its data centers are implemented with backups. Should one of the systems fail, its backup component can come online to avoid an outage. 

Last month, Applied Digital disclosed that it has signed a letter of understanding to build 400 megawatts’ worth of data center capacity for a U.S. cloud provider. One megawatt corresponds to the power consumption of several hundred households. Applied Digital said that the letter of understanding covers a 100-megawatt data center currently under construction in Ellendale, North Dakota and two upcoming facilities.

The company’s other source of revenue is a cloud business that leases graphics card clusters to customers. It offers access to Nvidia Corp.’s high-end H200 accelerators for AI workloads, as well as several other processors from the chipmaker. The list includes graphics cards such as the A40 that are geared primarily towards data visualization and rendering tasks.

The cloud unit accounted for $29 million of the $165.6 million in revenue it generated during its fiscal year ended March 31. In the last three months of the year, the unit brought four new AI clusters online. It plans to launch two more over the next few months.

According to the Wall Street Journal, Applied Digital will use the $160 million investment announced today to lay the groundwork for future debt financing rounds. That debt financing, in turn, will go towards expanding the company’s North Dakota data center campus and cloud business. 

Applied Digital’s raise comes four months after CoreWeave Inc., another AI data center builder that counts Nvidia as an investor, closed a $1.1 billion funding round. A few days later, CoreWeave announced plans to open two cloud facilities in the U.K. as part of a $1.25 billion infrastructure expansion initiative. The company has set a goal of expanding its data center network to 28 facilities by year’s end.

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