Applied Digital to Spin Off Cloud Unit with Ekso, Forming ChronoScale; Ekso Stock Jumps 54%
Applied Digital announced a non-binding term sheet with Ekso Bionics to spin off its cloud computing unit and merge it into ChronoScale Corporation, an AI-focused accelerated compute platform, retaining approximately 97% ownership post-close. Ekso’s stock surged 54% on the announcement, with the deal expected to close in H1 2026.
1. Spin-Off of Cloud Business into ChronoScale
Applied Digital announced a plan to separate its cloud computing division and merge it with Ekso Bionics’ accelerated robotics platform to form a new entity named ChronoScale Corporation. Under the non-binding term sheet, Applied Digital will contribute its entire cloud infrastructure and AI compute assets, while Ekso will bring its specialized robotics-focused accelerator technology. The combined entity is positioned to address growing demand for high-performance AI workloads in enterprise and research sectors.
2. Ownership Structure and Post-Transaction Control
After closing, Applied Digital is set to retain approximately 97% ownership of ChronoScale, reflecting its primary role as the technology and asset contributor. Ekso Bionics will hold the remaining stake and is expected to evaluate strategic options for its legacy business lines, including potential divestitures or partnerships. This structure ensures Applied Digital maintains operational and strategic control over the newly formed AI compute platform.
3. Share Performance and Technical Support
Since announcing the spin-off news, Applied Digital shares have stabilized following an initial intraday surge. The stock remains above its ascending 120-day moving average, which has acted as a key support level after the equity’s fall from a 20-year high reached last October. Year-to-date, the equity has gained approximately 225%, reflecting strong investor enthusiasm for the company’s AI infrastructure strategy.
4. Short Interest and Market Dynamics
Recent data show that short interest accounts for 33.5% of Applied Digital’s available float, equating to nearly three trading days required to cover all bearish positions at the current average volume. This elevated short interest underscores divergent investor views on the company’s valuation and the execution risk associated with the complex spin-off transaction. Investors will be watching institutional and retail trading activity for signs of a squeeze or sustained downward pressure.
5. Transaction Timeline and Outlook
The merger with Ekso Bionics is expected to close in the first half of 2026, subject to customary regulatory approvals and definitive agreement negotiations. Management projections anticipate that ChronoScale will begin commercial deployments of its accelerated AI compute nodes in the second half of next year, targeting data centers and research institutions. Analysts highlight that successful integration and early customer wins will be critical catalysts for Applied Digital’s next phase of growth.