Applied Digital Addresses Power Shortage for AI Data Centers
Applied Digital (NASDAQ: APLD) reported a 250% year-over-year revenue increase to $126.6 million in the second quarter of fiscal 2026, driven by surging demand for AI data centers. However, the industry faces a critical bottleneck in power generation, with natural gas turbines sold out until 2032. CEO Wes Cummins highlighted that ordering traditional gas turbines now could delay delivery until 2031 or 2032, jeopardizing growth plans.
In response, Applied Digital is innovating by utilizing steam turbines powered by natural gas, a technology that could bring online new AI data centers 3 to 4 years earlier. The company has partnered with Babcock & Wilcox to install 300 MW natural gas-fired power plants, with the goal of achieving a total capacity of 5 gigawatts over the next five years. The first of these plants is expected to be operational by 2028, significantly ahead of competing solutions.
Additionally, Applied Digital is set to deliver 100 MW of AI computing capacity at its Polaris Forge 1 campus, which will ultimately offer 400 MW for CoreWeave. The company signed a 15-year lease for 200 MW of AI capacity at its Polaris Forge 2 campus, projected to generate around $5 billion in revenue.
