Applied Digital's Gamble: CoreWeave's Debt and OpenAI's Losses
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Show Notes
Applied Digital, a Nasdaq-listed company, has a promising sixteen billion dollars in data center lease revenue, with a hundred megawatts set to deliver at Polaris One. However, eleven billion dollars of this revenue is tied to CoreWeave, a customer heavily in debt. CoreWeaves revenue surged by nearly one hundred seventy percent, but their total debt ballooned to over twenty-one billion dollars. This growth is fueled by OpenAI, but if OpenAIs projected losses materialize or investors cool on AI, CoreWeaves debt could trigger a chain reaction, impacting Applied Digitals bottom line. With macro headwinds and their own debt, Applied Digitals five-year outlook is uncertain, offering significant upside but also substantial downside risk.
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