Just ahead of one of the most significant AI infrastructure deals of the year, The Tech Capital spoke with Wes Cummins, CEO of Applied Digital (NASDAQ: APLD), to discuss the path to its US$7 billion lease agreements with CoreWeave (NASDAQ: CRWV).

The interview took place prior to the public disclosure of the deal, which will see CoreWeave lease up to 250MW of IT capacity at the site, with the option for an additional 150MW.

In the conversation, Cummins outlines how Applied Digital approached the leasing process for Ellendale, and how the company shifted its business model from digital asset hosting, primarily Bitcoin, to high-performance computing infrastructure for AI workloads.

He discusses factors that contributed to this transition, including market demand and long-term shifts in the compute environment.

The interview also explores the cyclical nature of demand from hyperscale tenants, with Cummins noting how infrastructure providers often need to plan around fluctuating deployment timelines and evolving customer requirements.

A key point of discussion is Applied Digital’s decision to sell off its AI cloud services business, which Cummins says was influenced by feedback from potential customers who viewed it as a competing service to the workloads they would host at Ellendale.

The conversation reflects on the broader growth in demand for AI compute capacity, particularly in light of developments such as the widespread adoption of generative AI tools like ChatGPT.

According to Cummins, this has led to increased interest in scalable infrastructure capable of supporting large-scale AI operations.