So for Applied Digital,

first and foremost, I wouldn't put us in the neocloud class.

So So we're building data centers.

We're effectively a highly technical real estate business, long-term leases, high quality tenants.

We do have CoreWeave.

We have that facility fully financed already with CoreWeave.

CoreWeave at that facility has an offtake with Meta that increases, I would say, the investment grade of that facility specifically.

You're not a neocloud, more of a real estate developer That said, you seem to be getting lumped in with

so it's really stereotypical actually uh

so um but you know i watched what happened to the community i grew up in and what happened is you know family farming has largely disappeared uh at least in the us um but a lot of places and so these communities get pretty decimated from what they used to be so it goes to commercial farming uh a lot fewer people a lot more um automation and so these communities have just been slowly dying for decades and so we were able to find the ones that you know have the ingredients that we need but we go to these communities uh that really need some economic boost and it's it's not just can we enhance the community a little bit it's a complete game change for that community.

So we're in Ellendale, North Dakota is 1,100 people.

We're in Harwood, North Dakota, it's 800 people.

Now we're in Louisiana.

We're in Boyce, Louisiana, 600 people.

We're in another town in North Dakota, it's 600 or 400 people.

And the thing that really hits home for people and what's great is it's not

And I'm just curious, what's the difference and why the change? So

we're using our franchise model to build AI factories and and.

What we refer to as a franchise model is we do the same thing repeatable across individual sites.

So we have five different campuses going at the same time.

We hire the same 20 positions at each campus that feeds up into our development group and into our operations group and into our construction group.

So the central group manages that.

And then you have these individual responsibilities down at the sites.

When you think about the timeline and sort of the time you have to continue to build, to continue to grow, I mean, how far out do you think?

You know, I wonder at what point does the pace of sort of these deal signings have to slow so your operations can catch up, or is that not an issue?

So, so for us, we spent the, the past 24 months actually designing our organization of how we scale for these builds, and then we've, we've put in place what we call a franchise model.

So we have the core of it, which is our, our core design team, our core operations team, our core construction team, and then we franchise that across these different, these different campuses.

So we have four campuses now.

And then we put the right people in place on the campuses, and this allows us to scale.

Now, there is a limitation that starts to show up at some point.

We're not there yet from a supply chain perspective, so from our, our MEP, our mechanical, our electrical, our plumbing.

Yeah.

What-- w-when did you know that you had to make the pivot to, to AI?

Sure.

So we, we started the company, and in twenty twenty-one...

Uh, what I would say about Applied Digital is we've never been a Bitcoin miner.

We were always a data center company.

So when we started in twenty twenty-one, what we did was when China cracked down on crypto, we saw the opportunity to build data center capacity for Bitcoin miners in the United States.

So we built, over a two-year period, we built five hundred megawatts of data center capacity, but we didn't mine the Bitcoin.

Of course

And are those assumptions you made then are true now? Because I guess that's a...

Yeah, let me walk through that.

So we started, the way the company started was we built 500 megawatts of Bitcoin data centers.

And we were a data center operator for Bitcoin.

We didn't mine ourselves.

The original idea was for if anyone wanted to be a Bitcoin miner.

So Eric, you want to be a Bitcoin miner.

This is a multi-part question, but what are your thoughts on on-site power?

Is it getting saturated? Are we overbuilding? And is there a commoditization happening of data centers? How do you respond to some of those questions?

Yeah, so I think it's been a really exciting 2025.

There's been a lot of announcements, a lot of what I would call hyperbole, crazy announcements.

When I was on with you last, I mentioned that I truly think there's definitely a bubble in announcements.

But I think the things that are getting a little bit conflated here are the numbers of announcements versus, you know, and then all of these numbers get wrapped up and we say, man, this is a huge build.

I don't think the numbers that are announced are the numbers that are going to get built.

So I think it's really going to come down into 2026 when we start to say, okay, The build, we're not going to be able to beat demand, but what are we going to be able to build? Who can build? Who has supply chain? Who has power? Who can build these facilities and bring them online and actually get operational? So I think that's going to be the big bifurcation in 26.

How do you see that? I know most of your properties, if I'm not incorrect, are in more rural areas.

We might not need all of it.

So what I would say to that is I think there's a lot of announcements of data centers being built.

There's a natural gate in the industry of power and supply chain to actually build and put these online.

And so what we do very carefully is we try to talk about what are we building? What have we contracted? What are we actually going to put online and what are we actually going to operate? But I will say I agree with you that there's way too many announcements.

But there's a lot of big, grandiose announcements in the market.

But we're really focused on actually what we can build, long-term contracts.

These are 15-year leases, both cases.

Are you talking about construction materials and like workers or what's what's what's scarce? What's the scarcest? Also, have you gotten any like local pushback? We've had a couple projects get some some the Heisman from areas in Wisconsin, for example.

Did you have one of the hyperscalers come to you and say, look, forget the Bitcoin play, work with us instead? Did you actually make the strategic decision to change and then proactively go out to the AI universe? Which came first? Yeah.

So it was proactive on our part.

We didn't have anyone come to us.

It was really, we have this power asset.

We know how to build high power density data centers.

We spent a lot of time looking at high performance computing facilities.

And then we spent... a significant amount of time hiring the correct people, getting the right supply chain partners, and we've continuously refined that.

Or has there been some resistance to what's being done to the landscape? and to what they've

So how is your capability on inference specifically as we move from machine learning to inference? And what does that say about demand? Because core waves moving, all the hyperscalers are moving in that direction as well.

Yeah, so you're going to see inference growing really fast.

I think you continue to see training grow, but inference is going to grow much faster.

And so facilities like ours, you know, you've seen data centers move to the middle of the country.

So you see Google with a big deployment in Omaha, Microsoft in Des Moines.

You've seen a lot of movement away from the coast and in the middle of the country because that's where the power is.

And our facility has grown.

What do you have to do to change the thinking and make it sort of the next AI hot data center play? And what's been the concern?