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Data center startup Crusoe Energy raises up to $500 million in equity capital from investors including Peter Thiel’s Founders Fund to expand facilities that provide the infrastructure fueling the data center boom AI.
The fundraising will value Crusoe at about $3 billion, more than double its valuation two years ago, according to three people with knowledge of the deal. It’s the latest fledgling company whose fortunes have exploded thanks to major spending on AI following the release of ChatGPT in late 2022.
Founders Fund, which has invested in Crusoe since its 2019 funding round and was also an early backer of OpenAI, will lead the new funding round, according to three people familiar with the negotiations. Felicis Ventures, another existing Crusoe investor, will also participate, the sources said.
Crusoe is part of a rapidly growing group of start-ups in a booming industry of “neoclouds” – data center companies that provide outsourced cloud computing to other technology groups to develop AI.
The industry has attracted widespread financial support from investors in Silicon Valley and Wall Street to finance the acquisition of tens of thousands of powerful AI chips from Nvidia, known as graphics processing units . These can be placed in data centers and rented to technology companies such as Microsoft and Meta. CoreWeave, the largest neocloud company, has raised more than $12 billion in debt and equity in a series of deals over the past 18 months.
Crusoe’s investment round comes just as it announced it signed a $3.4 billion deal earlier this month with Blue Owl Capital, an alternative asset manager, to finance the construction of a new data center in Texas. The facility will be leased to Oracle, which has an agreement to provide computing power to Microsoft and OpenAI.
Venture capitalists have rushed to invest in a technology that many believe will be as big as the Internet or mobile technology. More than 40% of the $93 billion spent by venture capital firms in the first half of this year went to AI startups, according to private markets data firm PitchBook.
The clamor to support cutting-edge AI models, such as OpenAI, Elon Musk’s xAI and Anthropic, quickly sent their valuations soaring, with OpenAI valued at $150 billion earlier this month. Instead, many venture funds are considering investing in either infrastructure to support AI or applications that use it, in the hopes of finding better value deals.
Crusoe was founded by quant trader Chase Lochmiller and energy investment banker Cully Cavness in 2018 to build data center modules that could collect waste gases from oil fields and use them to power high-volume calculations. energy intensity such as Bitcoin mining and AI. The company focused on creating more permanent data center facilities around 2020, acquiring large volumes of AI chips from Nvidia and leasing its cloud computing technology to companies building AI models. AI.
Late last year, Crusoe raised $200 million in debt using his chips as collateral from New York investment firm Upper90. The capital was used to purchase thousands of additional H100 GPUs from Nvidia.
Crusoe, Founders Fund and Felicis Ventures declined to comment.