Crusoe raises $1.4bn as investors pile in to AI data centres
Infrastructure provider to OpenAI triples its valuation to $10bn in a year
Data centre start-up Crusoe has raised $1.4bn, more than tripling its valuation to over $10bn in one year, as investors pile cash into a booming market for artificial intelligence infrastructure.
The oversubscribed equity fundraising round was led by Mubadala Capital and Valor Equity Partners. Crusoe, which is building OpenAI’s first big data centre in the US, has raised about $3.9bn since it was founded in 2018.
Huge spending on the infrastructure needed to run AI models is leading to record deals and valuations. Investments in data centres, chips and computing power has become a significant driver of US GDP growth this year.
“We are seeing tremendous and accelerating demand for compute infrastructure, unlike anything I’ve ever witnessed in my career,” Crusoe chief executive Chase Lochmiller told the Financial Times.
“OpenAI has been the most public with [its] large announcements, but this is not a trend that’s isolated to them. We are seeing it across the ecosystem,” he added.
Tech companies’ annual spending on AI is forecast to top $500bn by 2026, according to UBS. However, the AI building frenzy is leading to concerns about inflated valuations and speculative investments.
Data centres vast energy consumption is also straining US power resources and has threatened to slow down construction, as well as exacerbate environmental issues.
“Power is very scarce right now,” Lochmiller said. “There have been a lot of commitments made in the space where I can’t vouch for the reality they will happen.”
He added Crusoe’s current development pipeline amounts to 45 gigawatts of capacity. “That’s about eight to 10 New York Cities of power,” Lochmiller said.
OpenAI has signed as much as $1.5tn of deals to buy computing chips and build data centres in recent months. Crusoe is building a sprawling 1.2GW campus for OpenAI in Abilene, Texas, that is due to be completed by mid-2026 and will cost about $12bn.
Crusoe is separately building a 1.8GW campus for an unknown tech company in Wyoming, which it is planning to expand to 10GW in future.
Crusoe is one of a handful of so-called “neocloud” start-ups, fledgling groups that provide cloud computing and data centre hardware for tech companies’ AI models.
These groups have attracted huge investor enthusiasm as a way to access the AI infrastructure boom. Rival CoreWeave carried out an initial public offering this year and has reached a market value of more than $65bn.
Lochmiller started Crusoe, then called Crusoe Energy, to capture energy from natural gas flaring and use it to power data centres for mining bitcoin. The company later pivoted to AI infrastructure.
Crusoe’s other investors include chipmaker Nvidia, Peter Thiel’s Founders Fund, Fidelity and Franklin Templeton.
Some analysts have warned investors’ enthusiasm for AI and data centre deals is reminiscent of the dotcom bubble in the early 2000s.
Large tech companies have traditionally funded spending on infrastructure with their balance sheets. But the elevated levels of spending are attracting huge investments from private capital and increasing levels of debt.
Morgan Stanley estimated $1.5tn of financing from private capital and debt markets will be required to fund commitments made to build AI data centres over the next five years.
Crusoe and Blue Owl Capital, its construction partner on the Abilene site, raised $10bn in debt from JPMorgan to help fund its construction earlier this year. The debt was secured against the data centre and its 15-year lease with Oracle, which will supply the computing power to OpenAI. Crusoe also has smaller loans secured against its stash of Nvidia’s AI chips.
This week, Blue Owl formed a separate joint venture with Meta as part of a $27bn debt deal by the Facebook parent company to fund and develop its massive “Hyperion” data centre in Louisiana.
Last week, an investor consortium including BlackRock, Global Infrastructure Partners and Abu Dhabi fund MGX struck a $40bn deal to buy Aligned Data Centers, one of the world’s largest data centre operators.
Lochmiller said: “The amount of capital that will be required to stand up the infrastructure of intelligence is immense.”
“We feel good about the participants taking on these debts as they range from the best private companies to governments to leading start-ups generating billions of dollars of revenue.”