Crusoe Energy, a startup building data centers reportedly leased to Oracle, Microsoft, and OpenAI, is in the process of raising an impressive $818 million, according to an SEC filing. This funding round has already secured $686 million from 70 investors, leaving Crusoe with just $132 million left to raise.
A Record-Breaking Funding Round
The $818 million funding round makes it one of the largest private financings in the history of the tech industry. For context, this is more than double what was previously rumored, which would bring the startup’s total raised to approximately $1.5 billion in equity and debt.
A Brief History of Crusoe Energy
Crusoe launched in 2018 as a cryptocurrency business, powering its data centers with natural gas that would otherwise be "flared off" and wasted. Like many crypto mining operations, Crusoe pivoted as AI rose to prominence, securing deals with AI companies to provide high-performance computing and AI infrastructure.
A Joint Venture Worth $3.4 Billion
In early October, Crusoe announced it would enter into a joint venture with asset manager Blue Owl Capital to build a massive data center in Abilene, Texas. The campus is expected to be leased to Oracle, which will then rent it out to Microsoft and its close collaborator, OpenAI.
The Booming Market for ‘Neocloud’ Startups
There’s an emerging market for "neocloud" startups building low-cost, on-demand clouds for AI. CoreWeave, the GPU infrastructure provider, has stockpiled a jaw-dropping $12.7 billion in available funds, including nearly $10 billion in debt and nearly $3 billion in equity.
Other Notable Players in the Neocloud Market
Lambda Labs recently secured a special-purpose financing vehicle of up to $500 million. The nonprofit Voltage Park, backed by crypto billionaire Jed McCaleb, announced that it’s investing $500 million in GPU-backed data centers. And Together AI, a cloud GPU host that also conducts generative AI research, landed $106 million in a Salesforce-led round.
The Environmental Impact of Data Centers
The build-outs could have a significant environmental impact. IDC expects global data center electricity consumption to more than double between 2023 and 2028. According to Morgan Stanley, data center tech suppliers will create emissions equivalent to 2.5 billion metric tons of carbon dioxide by 2030.
Crusoe’s CEO on AI as the Solution
Crusoe CEO Chase Lochmiller recently suggested in an interview that AI is, in fact, the solution to the AI energy crises. "There’s all these gripes about AI’s energy usage," he told SiliconAngle analyst Dave Vellante. "But the solution to AI’s energy usage is AI. AI is the tool that we’ve been looking for that’s going to be able to drive these scientific breakthroughs that we need to achieve low-cost, sustainably-powered futures."
Conclusion
Crusoe Energy’s $818 million funding round is a significant milestone in the development of data centers and AI infrastructure. With its joint venture with Blue Owl Capital and its innovative approach to powering data centers with natural gas, Crusoe is well-positioned to capitalize on the growing demand for low-cost, on-demand clouds for AI.
Related News
- Nvidia’s Project Digits is a ‘personal AI supercomputer’
- Google is forming a new team to build AI that can simulate the physical world
- What are AI ‘world models,’ and why do they matter?
Subscribe to Our Newsletters
Stay up-to-date with the latest news in tech, including data centers, AI, and more. Choose from our selection of newsletters:
- TechCrunch Daily News: Get the best of TechCrunch’s coverage every weekday and Sunday
- TechCrunch AI: Covering the latest news in AI
- TechCrunch Space: Every Monday, get up to speed on the latest advances in aerospace
- Startups Weekly: The core of TechCrunch, delivered weekly
Related Stories
- Venture: Generative AI funding reached new heights in 2024
- Startups: Bench saved by the bell, and other last-minute deals that closed 2024
- Climate: Electra found a cheap, clean way to purify iron, and it’s raising $257M to make it happen
