Applied Digital Corporation and EKSO Bionics Holdings have entered into a non‑binding term sheet to spin off Applied Digital’s cloud‑computing business and merge it with EKSO to create a new company, ChronoScale. The transaction will leave Applied Digital with approximately 97% ownership of the combined entity, while EKSO will continue to operate its existing exoskeleton business and pursue future strategic options.
The deal is structured to separate Applied Digital’s data‑center development arm from its high‑performance GPU‑based cloud platform. Applied Digital Cloud, which generated about $75.2 million in revenue through August 31, 2025, will become a standalone entity within ChronoScale. The parties expect the transaction to close in the first half of 2026, pending customary due diligence, regulatory approvals, and shareholder votes.
EKSO’s financial performance has been a key driver of the pivot. The company reported a 58% decline in Q2 2025 revenue, falling to $2.1 million from $5 million a year earlier, underscoring the pressure on its exoskeleton business. By contrast, Applied Digital’s cloud platform has shown steady growth, and the merger is intended to leverage that momentum to enter the rapidly expanding AI compute market. While the total deal value has not been disclosed, the ownership structure indicates that Applied Digital will retain the majority of upside, positioning it to benefit from the high‑margin AI infrastructure segment.
Strategically, the combination aligns EKSO with a high‑growth sector that complements its existing technology. ChronoScale will focus on delivering purpose‑built GPU infrastructure for AI training and inference, a niche that has become capacity‑constrained as demand for large‑language‑model workloads surges. Management believes that the specialized platform will command pricing power and operational leverage, while Applied Digital’s data‑center expertise will accelerate deployment and reduce time‑to‑market. The move also provides EKSO with a potential exit path for its legacy business, allowing it to redirect capital toward the AI platform.
Market reaction has reflected the differing upside for the two parties. EKSO’s shares surged more than 50% in the days following the announcement, driven by investors’ enthusiasm for the company’s new focus on AI infrastructure and the potential for a high‑growth revenue stream. Applied Digital’s shares rose modestly, reflecting the fact that the majority of the new entity’s value will remain within APLD’s ownership stake. Analysts note that the deal signals a strategic pivot for EKSO and a value‑unlocking opportunity for Applied Digital, both of them positioning themselves in a market that is expected to grow at a double‑digit rate over the next few years.
"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. "As AI workloads continue to reshape the digital economy and intensify, infrastructure must be purpose‑built, not generalized," he added. Scott Davis, CEO of EKSO, emphasized that the transaction is a strategic step to maximize shareholder value and to explore future options for the company’s existing business.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.