Crusoe plans to leverage proceeds from its recent USD 600m Series D equity raise primarily as equity contributions for financing its expanding data center pipeline.

The Series D funds will enable Crusoe to secure sites and initiate early-stage development while also fulfilling the equity requirements to build large-scale, AI-focused data center projects, co-founder and chief operating officer Cully Cavness said in an interview.

These projects, which represent billion-dollar-plus investments each, are expected to rely heavily on project financing and debt, with equity checks in the tens of millions per project, Cavness said, calling the capital raise “transformational” for Crusoe.

The Crusoe facilities – the company anticipates undertaking “tens” of such projects – will support the growing demand for AI workloads, including training and inference, as the global vacancy rate for data centers remains critically low at 1-2%, Cavness said.

“There’s a new industry of AI data centers that needs to be built, and it has to be built very quickly to support all the demand and enthusiasm coming from AI,” he said. “And Crusoe is really well positioned to do that because we have this portfolio of projects and a team that is very energy-first.”

Environment and economics

The company is concurrently building out its Crusoe Cloud platform, a GPU-as-a-service offering that has become its primary revenue driver. Proceeds from the Series D will also be allocated to expanding Crusoe Cloud’s infrastructure and software features, supported by asset-backed financing and customer down payments for GPU clusters.

These financing mechanisms allow Crusoe to scale efficiently, maintaining a capital-light equity position for Crusoe Cloud, he said.

Cavness, a geologist with an MBA, said he has focused his career on energy production and the tension it creates between the environment and economics. Crusoe started out as a Bitcoin miner, using flared methane to power GPU computing – a part of its business that now has over 220 modular data centers for mining. Eventually the company ran out of its own data center capacity in the flaring fields.

“And that’s what led us to the data center development strategy and the third business,” he said, noting that the developments have the ability to unblock growth for Crusoe Cloud through vertical integration. He expects the data center development business will become the largest of the three revenue streams.

Financing

Crusoe recently announced a USD 3.4bn financing agreement – referred to as a “fully funded forward takeout” – for its Abilene, Texas, data center, secured through a joint venture with Blue Owl Capital.

The 206 MW Abilene project, designed for phased buildouts, will serve as a cornerstone for Crusoe’s development efforts, with potential plans to integrate behind-the-meter solar pv systems to enhance sustainability.

Crusoe’s pipeline includes a 15 GW portfolio of clean energy projects, incorporating renewables such as solar and hydroelectric power, as well as natural gas projects with carbon capture and sequestration capabilities. The company’s approach combines traditional grid connections with strategic deployment of renewables, especially in areas with grid congestion or excess wind generation, to stabilize pricing and reduce curtailment.

For example, the Abilene facility is strategically located within a wind-dense node in West Texas, where negative pricing and curtailment are common. By positioning its data centers in such areas, Crusoe creates demand to optimize renewable energy usage. While currently served by the grid, Crusoe is evaluating building a “significant” behind-the-meter solar facility at the site, Cavness said.

Crusoe envisions maintaining long-term ownership of its data centers, though it may consider co-investment opportunities to optimize capital deployment. The company also retains flexibility in its corporate capitalization strategy, relying on private markets for funding while remaining open to a potential IPO in the future, depending on market conditions.

“We’ll take cues from the market,” Cavness said. “The private markets are supplying us with all the capital that we need. Eventually there could be a pathway to an IPO, but it is not something we are actively planning and pursuing right now.”

*Please note this story is part of NPM’s US Data Center’s coverage, which will be a separate comprehensive content set launching in 1Q25. Please contact help@newprojectmedia.com or your account manager for more details or to trial our Data Center’s coverage once released.

*This story was originally published exclusively for NPM subscribers.

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