Applied Digital CEO Wes Cummins on plans for cloud business spin-off
2025-12-31_16-33 • 3m 21s
David Faber (Co-anchor of Squawk on the Street)
00:00.000
Joining
us
now
exclusively
is
the
company's
chairman
and
CEO,
Wes
Commons.
Wes,
good
to
have
you
back.
Um,
I
want
to
start
off
on
this
deal
was
announced
a
couple
of
days
ago
and
then
kind
of
move
more
broadly
in
terms
of
the
overall
ecosystem.
But
you
say
by
separating
the
David Faber (Co-anchor of Squawk on the Street)
00:14.720
accelerated
compute
platform
from
Applied
Digital's
data
center
ownership
and
development
business,
you're,
you
know,
you're
going
to
allow
each
business
to
scale
independently.
But
I
thought
you're
selling
to
the
same
customer.
Are
you
not?
And
if
you
are,
then
why
bother.
Wes Cummins (Chairman & CEO)
00:31.640
Actually,
thanks
David.
Thanks
for
having
me
back.
But
actually
the
the
two
businesses,
one
being
a
data
center
business
sells
to
uh
we
really
target
hyperscalers.
I've
mentioned
this
before.
It's
It's
Microsoft,
it's
Google,
it's
Oracle,
it's
Amazon,
it's
Meta.
It's
for
we've
Wes Cummins (Chairman & CEO)
00:47.920
So
those
companies
actually
compete
somewhat
with
our
cloud
business
and
then
we're
spinning
that
out.
And
so
that
business
actually
goes
a
lot
after,
you
know,
those
but
really
the
same
customers
that
our
customers
for
our
data
center
business
would
go
after.
So
it
really
Wes Cummins (Chairman & CEO)
01:04.680
separates
that
conflict
for
us
and
allows
us
to
really
just
focus
on
the
data
center
business
and
the
customers
that
we
we
go
after
for
the
data
center
business
in
the
future.
David Faber (Co-anchor of Squawk on the Street)
01:14.240
I
see.
So
it's
not
about
necessarily
just
outfitting
the
data
center
with
all
the
compute
and
doing
that
in
a
way
that
adds
value.
It's
it's
different.
Wes Cummins (Chairman & CEO)
01:22.680
Yeah,
so
one
business
develops
just
the
building,
you
know,
is
the
landlord
and
then
our
customers
bring
in
servers,
and
then
they
operate
their
cloud
business.
And
then
they
are
the
other
business,
the
one
that
we're
spinning
out
actually
owns
those
servers
and
sells
them
to
to
Wes Cummins (Chairman & CEO)
01:38.040
an
end
customer
typically
on
an
hourly
or
monthly
basis.
And
so
it's
two
really
separate
businesses
and
they
they
operate
differently,
different
risk
profiles.
One
has
a
much
shorter
duration,
one
much
longer.
But
we're
as
at
Apply
Digital
as
we
said
earlier
in
the
year,
we're
Wes Cummins (Chairman & CEO)
01:51.760
really
focused
on
the
data
center
development,
long-term
leases,
15-year
plus
leases
on
that
business
and
we'll
be
spinning
out
this
cloud
business.
But
there
there's
a
lot
of
upside
potential
on
the
cloud.
We're
seeing
large
contracts,
huge
amount
of
demand.
The
end
demand
Wes Cummins (Chairman & CEO)
02:05.360
driver
is
the
same
for
both
businesses.
It's
really
just
the
customer
stats
are
different.
David Faber (Co-anchor of Squawk on the Street)
02:09.120
Understood.
All
right.
That
That
helps
clarify.
You
know,
speaking
of
of
course,
your
data
center
business,
your
access
to
power
certainly
has
been
a
key
a
key
point
there
uh
and
continues
to
be,
I
would
think.
But
you
know,
what
are
you
seeing
in
terms
of
demand,
particularly
David Faber (Co-anchor of Squawk on the Street)
02:24.360
given
you've
got
sites
obviously
that
have
the
contracted
power
that
so
many
of
the
hyperscalers
want?
Wes Cummins (Chairman & CEO)
02:29.680
Yep.
Demand
remains
robust.
And
I
try
to
bifurcate
this
a
little
bit.
I
think
that
overall
industry
demand
remains
extremely
strong.
We're
seeing
that.
But
also,
I
think
for
us,
given
the
success
we've
had
with
actually
building
and
putting
capacity
online,
on
schedule,
on
Wes Cummins (Chairman & CEO)
02:48.720
budget,
which
I
think
is
going
to
become
a
much
bigger
and
bigger
issue
in
'26,
I
think
we're
seeing
increased
demand
specifically
for
Applied
Digital
because
we're
qualified
with
most
of
those
hyperscale
dealers
I
mentioned
from
design
perspective,
technical
perspective.
We
Wes Cummins (Chairman & CEO)
03:03.880
brought
100
megawatts
on
back
in
October
and
November,
excuse
me
for
four
weeks
which
was
on
time.
I
think
actually
bringing
the
capacity
online
and
building
and
completing
the
builds
is
really
going
to
be
the
story
of
2026
and
it's
creating
a
lot
of
additional
demand
for
our
Wes Cummins (Chairman & CEO)
03:20.240
company.
Autoscroll