Applied Digital, a builder of data center infrastructure, announced Monday it will lease two of its facilities in Ellendale to CoreWeave, a generative artificial intelligence company.
The foundations for a massive data center operation have been laid in Ellendale, and the town’s 1,100 residents are set to have a new neighbor after an artificial intelligence company signed on as one of the first tenants to occupy the freshly built campus.
On Monday, June 2, Applied Digital, a company that builds data center infrastructure, announced it will be leasing out two of its “high-performance computing" facilities in Ellendale for $7 billion over the next 15 years to an artificial intelligence company called CoreWeave.
The term “data center” is generally used to describe facilities lined top to bottom with powerful computers that store, process and transmit digital information. They are used for a variety of services, from cryptocurrency mining to cloud computing, and are highly secure and require highly technical jobs.
The number of data centers in North Dakota is not tracked, but several have popped up in recent years due to the state’s lax regulatory environment and cool climate.
CoreWeave will use Applied Digital's facilities to run monster computers and power-generative AI — a form of AI that uses existing data to create new data, like using multiple photographs to make one fake image.
Powering such emerging technology requires hundreds of thousands of square feet of facilities and a behemoth amount of power.
According to Nick Phillips, Applied Digital’s executive vice president of external affairs, the two facilities leased out to CoreWeave will use a combined 250 megawatts to power AI and another 82 megawatts for operations, namely cooling.
The power load is massive. If one megawatt is equal to 1 million watts, and a small laptop computer takes 50 watts to function, 20,000 laptops could be powered from CoreWeave’s power use alone, not including operations.
The facilities recycle water, so their usage compares to that of a household, Phillips said.
After the lease agreement was announced Monday, the stock value of each company soared. When markets closed Thursday, June 5, CoreWeave's stock had risen about 22%, and Applied Digital's increased by nearly 88%.
In addition to the two facilities now occupied by CoreWeave, Applied Digital’s campus includes a 180-megawatt bitcoin mining facility and another high-performance computing facility for an overall capacity of 530 megawatts.
Phillips said the company hopes to expand the campus's capacity to a full gigawatt, or 1,000 megawatts.
"If folks have an open mind and are willing to have good, frank conversations with somebody who is looking to come in, you can have some really good, positive outcomes," he said. "One of the things I've enjoyed very much about Ellendale is we had those conversations upfront."
The power use and wealth can be intimidating, Ellendale residents and leaders told Forum News Service, but they said the benefits of bringing the global economy into the small town outweigh the “growing pains.”
Around 300 to 350 full-time employees will work at the campus, 100 of whom are expected to reside in Ellendale, according to Phillips.
To prepare for the population influx, the local and state governments worked with Applied Digital to facilitate the construction of 20 new homes with plans to build more, including a 34-unit apartment complex.
The campus was also recently annexed into the city of Ellendale, meaning its taxes will soon go to the city instead of the township.
“The annexation will allow for more services without increased costs for the people of Ellendale,” said Don Flaherty, Ellendale mayor and Dickey County tax director.
Some residents, like Nathan Walstad, see the growth as necessary to resurrect the town's declining population.
“There's this suspicion when people move to small North Dakota towns, like 'what's the agenda?' But those growing pains only go away with time," he said.
Walstad was born in Ellendale and has lived there sporadically since. He pointed to the handful of new restaurants that have opened since Applied Digital came to town, which weren't around when he moved back home five years ago.
He described the newcomers as "delightful people" who rejuvenated a town that saw a steady decline in population for decades.
Others, however, are concerned about how the new industry will change the town’s identity and impact local resources.
Renee Hutchinson, who retired to Ellendale with her husband shortly before Applied Digital’s facility went up, said she doesn’t “begrudge” the company, but she wishes she had known about it before moving.
“We just wish we knew about it (the campus) before we bought here so that we could be further away from the bustle,” Hutchinson said, also citing concerns about grid stability.
Small towns are often afraid of change, Flaherty said, but as far as Ellendale’s population is concerned, the facility “will ultimately benefit everybody involved," he said.
Ellendale is about 65 miles south of Jamestown, just north of the South Dakota state line.
