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Applied Digital (NASDAQ: APLD) shares climbed about 1.2% in after-hours trading on Monday after the company announced a proposed business combination designed to spin off its cloud computing operations into a new, standalone entity. The transaction is aimed at unlocking value from its rapidly growing artificial intelligence infrastructure business while allowing its data center operations to pursue independent growth strategies.
Under the proposal, Applied Digital Cloud will combine with EKSO Bionics Holdings (NASDAQ: EKSO) to form a new company named ChronoScale Corporation. The newly created entity will focus on delivering accelerated compute infrastructure optimized for artificial intelligence workloads, a segment seeing surging demand as enterprises scale AI model training and inference. Once the transaction is completed, Applied Digital is expected to retain approximately 97% ownership of the combined company, giving it continued exposure to the high-growth AI cloud market.
The planned spinoff reflects management’s view that the accelerated compute market is capacity constrained, with demand outpacing available infrastructure. By separating Applied Digital Cloud from its broader data center business, the company believes both platforms will be better positioned to attract capital, scale operations, and pursue targeted partnerships. ChronoScale is expected to concentrate exclusively on high-performance computing and AI cloud services, while Applied Digital’s remaining business can focus on core data center development.
Applied Digital Cloud has already built a strong track record in AI infrastructure. In 2023, it became one of the first platforms to deploy NVIDIA’s H100 GPUs at scale, a critical advantage in serving demanding AI workloads. For the twelve months ending August 31, 2025, the cloud business generated approximately $75.2 million in revenue, underscoring its growing relevance in the AI compute ecosystem.
“ChronoScale is intended to bring together a proven operating platform and a clear mandate: deliver accelerated compute at scale for the most demanding AI workloads,” said Wes Cummins, Chairman and CEO of Applied Digital. Meanwhile, EKSO Bionics plans to explore strategic alternatives, including a potential sale of its existing operations, following completion of the combination.
The transaction is expected to close in the first half of 2026, pending due diligence, final agreements, and required regulatory and shareholder approvals.
