Applied Digital Seals $97M Crypto Mining Sale

Marathon Digital is purchasing the West Texas property.

The Garden City, Texas, campus provides hosting agreements for blockchain mining clients, such as Marathon, under third-party arrangements

Completed in 2023, the Garden City, Texas, campus provides hosting agreements for blockchain mining clients, such as Marathon, under third-party arrangements. Image courtesy of Applied Digital

Applied Digital Corp. has agreed to sell a recently completed 200 MW cryptocurrency mining campus located in Garden City, Texas, to Marathon Digital Holdings, one of its customers, for a gross purchase price of roughly $97.3 million. The seller will net approximately $87.3 million from the trade, after adjustments contemplated in the agreement.

The acquisition is expected to close in the second quarter of 2024. The transaction will also release $12 million of restricted cash that Applied Digital had previously committed as collateral for the facility’s documentary credit agreements.

For Wes Cummins, Applied Digital’s chairman & CEO, the sale was motivated in part by a desire to reallocate capital to North Dakota, and to further the development of High-Performance Computing facilities there.

According to a report from Newswest 9, the Garden City campus opened in December of 2023, having been officially energized two months prior. The facilities total 125,000 square feet, and are configured for tenants in cryptocurrency mining. Upon opening, the project brought the company’s total operational capacity across its blockchain-related holdings to 480 MW. The facility’s location at 12022 Ranch Road 33 benefits from West Texas’ strong winds, which both power local free-to-use turbines and cool the facility’s equipment.

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Marathon, the facility’s new owner, currently hosts 34,200 operational miners within the space under a multi-year colocation agreement. At the moment, the firm hosts 68,240 miners in the nearby town of McCamey, its largest site. 36,450 miners are in Granbury, just outside of El Paso, Texas. At one of Applied Digital’s facilities in Ellendale, N.D., Marathon operates 56,590 miners, its second-largest site.

The next data center hotspot?

Data centers, particularly those with power intensive uses and requirements, are seeing record development and power purchase numbers around the Southwest and Midwest, in part due to the regions’ combination of cheap land and energy, as well as the prevalence of cryptocurrency mining and artificial intelligence. In February, Edged Energy signed on to build four new data centers totaling north of 300 MW in capacity, three of which are outside Chicago, Phoenix and Kansas City.

In the largest deal of the year, Meta Platforms announced the construction of an $800 million, 700,000-square-foot campus in Jeffersonville, Ind.

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