Applied Digital, a blockchain and artificial intelligence (AI) infrastructure provider, has inaugurated its latest 200-megawatt (MW) data center in Garden City, Texas. The facility represents the third blockchain hosting center from the company to become operational in North America.
“Once fully energized, this location will bring Applied Digital to the full planned 480MW of total hosting capacity across its blockchain hosting facilities,” read the company’s announcement on Friday.
To put this into perspective, a standard home light bulb requires 60 watts. In contrast, Cambridge’s estimates suggest that the entire Bitcoin network currently demands 14.83 GW, up from its 12.89 GW estimate in September. A megawatt (MW) is a power unit equal to one million watts, while a gigawatt (GW) equals one billion watts.
Applied Digital Chairman and CEO Wes Cummins explained that the facility would support 7-8.5 EH, depending on the miner’s model. An exahash equals one quintillion hashes.
It’s essential to note that this mining facility does not harness any of the hash rate itself. Applied Digital exclusively hosts the mining rigs of other companies. This business model has helped the firm generate $22 million in revenue in the quarter ending in May 2023.
AI and Cryptomining
Like many mining firms, Applied Digital is transitioning its focus from Bitcoin mining to high-performance computing (HPC), which supports the AI sector. HPC, similar to mining, requires large data centers, cooling systems, and affordable energy to operate profitably. According to Adam Sharp, Research Director at HIVE Digital, HPC-cloud services are much more profitable per unit of energy than Bitcoin mining.
Applied Digital is aligning its new expansion efforts with HPC and AI workloads. However, despite this strategic shift, Applied Digital’s stock, trading under the APLD ticker on the NASDAQ, saw a 5.3% drop in value on Friday.
This pivot reflects the wider trend among Bitcoin miners and hosting companies diversifying their services due to changing market conditions and evolving profitability dynamics in the cryptocurrency mining industry.
