Apr 18, 2025 | Posted by Abdul-Rahman Oladimeji
Digital infrastructure firm Applied Digital has announced that it is set to sell its cloud services business as a result of both internal and external pressures. The company appears to pave the way for a potential pivot to becoming a real-estate investment trust (REIT) in the near future.
“After careful consideration, our board of directors has determined that reviewing strategic options for this business is in the best interest of the shareholders,” said Applied Digital CEO Wes Cummins, in an earnings call earlier this month. "This decision is based on several factors. First, our discussions with potential customers regarding leasing our data center business [makes] it clear that our cloud business is typically viewed as a competitor."
“We also believe that if we were to transition to a data center REIT in the future this would lower our cost of capital as investors typically assign higher multiples to data center business due to their stability and long-term growth potential,” Cummins added.