Crusoe Energy got its start powering the compute-intensive trend of 2018: bitcoin mining. The company’s idea, which was novel at the time, was to capture flared gas from oil wells to power the servers.
But when the artificial intelligence boom hit, Crusoe was perfectly positioned to capitalize. The company pivoted, spearheading a new type of vertically integrated infrastructure provider built for the AI era.
Today Crusoe announced a $600 million raise to help the company make good on its bet: that bringing power generation and data center development under one roof is key to cashing in on the AI race. The San Francisco-based company plans to manufacture its own electrical equipment, develop its own power generation, and deliver massive AI computing capacity to tech’s biggest names.
The Series D, CEO Chase Lochmiller told Latitude Media, will largely be dedicated to scaling up Crusoe Cloud, their cloud computing platform for AI workloads, which the company also made publicly available today.
In combination with project financing, the raise will also help support Crusoe’s efforts to scale up its AI infrastructure footprint. The company has a $3.4 billion joint venture with Blue Owl to build out its latest project in Texas, and a15-gigawatt data center pipeline.
Crusoe’s first-of-a-kind strategy
Crusoe’s vertically integrated approach is already being tested in Abilene, Texas, where the company broke ground in June on what will be one of the largest high-performance computing clusters globally. That 1.2-GW project, which is reportedly being built for Oracle and OpenAI, is coming online at a speed rarely seen in the data center industry — in mere months, its first data center hall is already online and in use.
As Lochmiller explained at a Latitude Media event earlier this month, the key to this rapid deployment is simplifying the process. That’s why Crusoe decided to manufacture its own electrical infrastructure.
“Things like electrical rooms we actually manufacture offsite in controlled manufacturing environments,” Lochmiller said. “Things like switch gear…ships to site almost as a [pre-assembled] data center lego block that fits together with other components. That enables more rapid construction, especially when you’re dealing with more remote environments.”
Moving forward, Lochmiller said the company is focusing on scaling up its manufacturing arm “to control more of the supply chain, to control more of the timeline, and also to dramatically reduce cost and time to market.”
In addition to constraints on things like backup generation equipment and chillers, Lochmiller said labor to build Crusoe’s massive projects is another key challenge.
“People inherently think of AI as this digital experience, but it actually requires tremendous amounts of blue collar labor to make it happen,” he explained, adding that the Abilene project currently sees around 900 workers on-site daily.
Overcoming the power problem
Of course, the key bottleneck facing the data industry today is access to power. Crusoe thinks there are four options to backup power that are currently viable, Lochmiller said: diesel, gas, a secondary utility feed, or battery storage.
(Other options, like hydrogen fuel cells, he said, are still in the “science experiment camp” and too expensive to use.)
“We’re spending a lot of time on the market of gas generation with carbon capture and sequestration,” he added. “What we like about this is it leverages a lot of reliability, a lot of the existing supply chain and infrastructure…but eliminates the climate impact from the CO2 emissions.”
That’s the approach Crusoe is taking in Abilene, where it is leveraging a 300 megawatt gas plant for backup power. There are also financial incentives, Lochmiller added, pointing to the 45Q tax credit in the U.S.
As part of the company’s broader power strategy, Lochmiller is very interested in exploring how to use those four backup power options as peaker plants.
“The funny thing about building these data centers…is you’re kind of building either two power plants, or a grid connection and a power plant,” he said. “It’s a lot of infrastructure, and then you end up not really running your power plant.”
Figuring out how to monetize that backup power — whether by selling power to the grid or curtailing during moments of peak demand — is a key priority for Crusoe. But the company’s ambitions extend well beyond Abilene, and are meant to keep pace with soaring demand from AI companies.
“The number of people I talk to that are like, ‘Yeah, I want a gigawatt data center,’ I mean it’s a remarkable number of people that are asking for that scale of capacity,” Lochmiller said at the Latitude Media event.
The company plans to replicate the Abilene model in future projects, Lochmiller confirmed. It’s a model, he said, that’s in line with broader industry shifts. For instance, Google announced this week that it would partner with Intersect Power to build data centers near pre-planned renewable energy parks.
“We think this is the model that all of the big guys should converge upon,” he said. “It’s not an accident that [Google’s project is] very close to Abilene. It’s because it’s an area where it is very economically viable to build large-scale renewable generation assets on a very, very low cost basis.”
