Applied Digital has asked tenants like Oracle and Meta for billions of dollars in guarantees since at least last year to secure power before finalising leases, Bloomberg reported on 14 November. The size of each guarantee and its terms were not in the parts of the report we could read.
Applied Digital’s own 10-Q for the quarter to 31 August lists $35.7 billion of minimum contracted lease payments, 22.3 times its $1.60 billion of stockholders’ equity, by our arithmetic. It had already tied up $801.5 million in equipment and utility deposits and standby letters of credit, about half that equity.
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The key insight: As we read it, the request moves part of the grid risk from the developer to the tenant: Applied Digital’s 10-Q shows $801.5 million of its own deposits and letters of credit already posted, about half its equity, by our arithmetic, and Bloomberg reports it now asks tenants such as Oracle and Meta for guarantees before leases are final.
The Bloomberg article, by Michelle Cheng and Dawn Lim, sets the request in a wider shift: tech firms such as Oracle and Amazon “are already being called on to backstop costs of the power infrastructure”. It links that to voters who backed Democrats “from Ohio to Texas” on pledges to shield households from data centres’ power demand.
Techmeme’s summary of the report says Applied Digital has made the request “since at least last year”, to secure power “before finalizing leases”. The article is behind a paywall; we have not read its full text, and we do not report figures from it beyond what is quoted here.
Applied Digital’s minimum contracted lease payments by fiscal period, from its 10-Q for the quarter ended 31 August 2026. Period sums and shares are our arithmetic; the table excludes expense reimbursements and variable rent.
What Applied Digital’s Filing Shows
The 10-Q, filed on 7 October, puts Applied Digital’s aggregate contracted critical IT load at 1,410 MW after a June lease with a “high investment-grade hyperscaler” for 210 MW at its Delta Forge 2 campus, worth about $5.2 billion over the base term. The filing does not name Oracle or Meta as tenants.
Minimum contracted payments run from $468.0 million in fiscal 2027 to $2.37 billion a year in fiscal 2030 and 2031, with $26.58 billion due after that. At 31 August the company carried $6.26 billion of long-term debt, net, and $2.95 billion of cash and cash equivalents.
Applied Digital already puts up its own collateral for power. Its balance sheet shows a short-term equipment and utility deposit of $560.5 million, up from $500.3 million at 31 May, and $241.0 million of standby letters of credit were outstanding under its 2026 revolving credit facility.
The filing also describes a 4 October power purchase agreement and a “related credit support agreement” with Base Electron for an approximately 1,200 MW gas-fired plant in North Dakota for its Polaris Forge 3 campus. The company owned about 10% of Base Electron, which the 10-Q says is owned and managed in part by officers and directors of Applied Digital, acting in their individual capacities.
The Numbers, by Our Arithmetic
Leases vs equity. $35.73 billion of minimum contracted lease payments over $1.60 billion of equity attributable to Applied Digital is 22.3 times. Long-term debt, net, of $6.26 billion is 3.9 times equity.
Collateral already posted. $560.5 million of equipment and utility deposits plus $241.0 million of standby letters of credit is $801.5 million, 50% of equity. The 10-Q does not split the deposit line between equipment and utilities.
When the leases pay. $2.05 billion, or 5.7%, of the contracted payments falls in fiscal 2027 and 2028; $7.10 billion, or 19.9%, in fiscal 2029 to 2031; and $26.58 billion, or 74.4%, after fiscal 2031.
Responses and Earlier Coverage
We found no statement from Applied Digital, Oracle or Meta responding to the report as of 15 November.
As we read the lease table, most of the money is far out: 74.4% of the $35.7 billion of minimum contracted payments falls after fiscal 2031, by our arithmetic, while the power and collateral the 10-Q describes are needed before the halls are delivered.
Bloomberg, 14 November 2026
“The political shift will likely give impetus to financial requirements on tech firms like Oracle Corp. and Amazon.com Inc. which are already being called on to backstop costs of the power infrastructure.”
Three Implications
FOR TENANTS Bloomberg reports that Applied Digital asks tenants such as Oracle and Meta for guarantees before leases are final; the size and terms were not in the text we read.
FOR THE DEVELOPER’S BALANCE SHEET The 10-Q shows $6.26 billion of long-term debt, net, against $1.60 billion of equity at 31 August, 3.9 times, by our arithmetic.
FOR POWER DEALS The 10-Q describes a 15-year power purchase agreement with Base Electron for an approximately 1,200 MW gas-fired plant, signed with a related credit support agreement.
The framework sets out two rules for the stack, the first being: “Each layer is constrained by the one below it. You cannot ship a model without compute. You cannot ship compute without silicon. You cannot ship silicon without foundries. You cannot ship foundries without energy.”
As we read it, a guarantee for power before a lease is signed is that rule written into a contract: the compute layer, here a data-centre developer, asks its tenants to underwrite the energy layer beneath it. The framework predates the report and does not discuss Applied Digital.
Applied Digital balance-sheet lines at 31 May and 31 August 2026, from its 10-Q filed on 7 October 2026. The $1.3 billion debt change is our arithmetic.
What Is Not Established
The size of any single guarantee, which tenants agreed and on what terms are not in the text we read. Bloomberg’s “billions” is the report’s word; we do not convert it into a figure.
The 10-Q does not say which leases, if any, carry tenant guarantees for power, and its lease table excludes operating-expense reimbursements and variable rent increases. The 22.3 times and 50% ratios are ours and use balances at 31 August 2026.
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Bloomberg reported on 14 November that Applied Digital has asked tenants like Oracle and Meta for billions in guarantees to secure power before finalising leases. Its 10-Q lists $35.7 billion of minimum contracted lease payments, 22.3 times its $1.60 billion of equity, and $801.5 million already tied up in deposits and letters of credit, by our arithmetic.
A note on sourcing. The guarantee request is as reported by Bloomberg on 14 November 2026; we read the article’s opening and Techmeme’s summary of it, not its full text, and give no figure for the guarantees. Every balance-sheet and lease figure comes from Applied Digital’s 10-Q filed on 7 October 2026. The ratios and period shares are our arithmetic. We found no statement from Applied Digital, Oracle or Meta responding to the report as of 15 November 2026 (about 14:00 UTC).
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
