Crusoe is making a bet that better power electronics will make its data centers more flexible.
The AI infrastructure company and lead developer of the Stargate campus in Abilene, Texas, announced today that it’s partnering with ON.energy, which builds power-systems technology for large loads. Starting this year, Crusoe will deploy five gigawatts of ON.energy’s uninterruptible power systems, or UPS, at its campuses across the country.
It is the latest of a series of deals through which Crusoe has been building a supply chain of the technologies it needs for its nearly 5-GW pipeline of data centers, at a time when shortages of equipment from transformers to gas turbines threaten to delay the AI infrastructure buildout. Last March, the company announced two major deals with Form Energy and Redwood Materials for battery deployments.
ON.energy’s UPS — a piece of medium-voltage electrical equipment comprising a backup battery, two power conversion systems, and a transformer — is designed specifically for AI data centers. It sits between the data center and its power source and decouples the two, acting as a shock absorber against both internal GPU load swings that would otherwise destabilize the grid, and external voltage faults that risk damaging sensitive equipment.
The UPS acts as an especially important buffer for grid-connected AI data centers, which are emerging as a threat to grid reliability not just because of how much power they draw, but also because of how they behave once connected.
As the announcement explains, AI training requires data centers to “ramp up and down in synchronized bursts,” which creates dramatic fluctuations in power demand. If unmitigated by systems like the UPS, the fluctuations can propagate back into the transmission system, adding stress to the grid.
Furthermore, when there are voltage faults or other problems that could end up damaging delicate and expensive hardware, data centers can suddenly drop off the grid entirely. This risks creating large load-loss events, during which a utility suddenly loses GWs of demand all at once, which creates a demand-supply imbalance that can damage grid and generation assets.
In February 2025, for instance, a high-voltage power line malfunction in Virginia caused 40 data centers, consuming roughly 2 GW, to simultaneously switch to backup power, sending the grid operator scrambling to limit damage. It was the second such incident in a matter of months.
The North American Electric Reliability Corp. has since analyzed numerous load-loss events across the East Coast and Texas. It found that the “customer-initiated large load reductions” occurred in seconds, leaving little or no room for real-time responses. The investigation led to NERC issuing a rare Level 3 alert in May about the risks of data centers to grid reliability, and calling for a major regulatory shift to address those blind spots among utilities, grid operators, and data center owners.
The Crusoe-ON.energy deal, however, has the potential to mitigate exactly those risks for Crusoe’s data center customers and the grids that serve them. (While Crusoe’s AI infrastructure strategy relies on vast, behind-the-meter power systems, the majority of its data centers will also have a grid connection.)
And in fact, capabilities like those the AI UPS systems allow are starting to become a prerequisite for grid interconnection. ON.energy’s AI UPS, for instance, meets ERCOT’s latest large load interconnection requirements, which mandate that loads of 75 megawatts or more must “ride through” during disturbances, remaining connected or restoring at least 90% of power draw within seconds.
“This technology protects our infrastructure, it protects our generation assets, and it aligns with where grid requirements are heading,” Chris Dolan, Crusoe’s chief data center officer, said in the press release.
