Applied Digital is partnering with New Delhi-based GMR, a leading global infrastructure conglomerate with interests in Airport, Energy, Transportation and Urban Infrastructure, to raise a $100 million fund that will purchase distressed mining hardware and digital infrastructure assets.
Applied Digital, formerly known as Applied Blockchain, was formerly one of the players in the cryptocurrency mining industry. It removed itself from the cryptocurrency mining sector after ceasing its own mining operations in March, and shareholders overwhelmingly supported the name change, officially embracing the new focus on managing data centers instead of mining.
According to a corporate filing with the SEC, the new name was approved by more than 49 million shares, with just 14,000 voting against it and 7,000 abstaining, during the firm’s annual meeting on November 10. This is the company’s second new name; up until June 2021, it was known as Applied Science Products. Nearly 12 million shares held in brokerage accounts were not voted.
Currently, the new fund, managed by a recently established company named Highland Digital that is jointly owned by Applied and GMR, seeks to collect $100 million from outside investors to buy and operate distressed crypto hardware.
According to Wes Cummings, Applied Digital CEO, the data center builder and operator continues to invest in bitcoin mining equipment despite recently “broadening” its activities to include non-crypto assets. The new fund will purchase the hardware and host it in its data centers, where Highland Digital will operate the hardware and, depending on market conditions, either sell bitcoin or “flip” the machines.
Moreover, they have the infrastructure to host, which puts them in a great position to do that. The business’s facilities are designed for low-cost, processor-heavy activities, and to further profitability, cheap power is acquired from adjacent wind farms.
The equipment initiative was unveiled as the state of the industry began to deteriorate. The significant decrease in cryptocurrency prices this year had already put pressure on miners, and the demise of FTX only served to make matters worse by driving bitcoin down from over $20,000 earlier this month to less than $16,000 today. Profitability requires low operational costs.