Crusoe

Between 1900 and 2016, over 1.5 trillion barrels of oil were produced worldwide. As of 2024, the United States accounted for 17% of total production and two-thirds of total consumption. While crude oil helps create a variety of important consumer goods, from clothing to medicine, it does not come without its drawbacks: right-to-capture laws in the twentieth century encouraged environmental damage and widespread waste of an invaluable, nonrenewable resource. In fact, one estimate indicated that oil producers waste an estimated 75% of the oil and natural gas found in the US.

With the adoption of artificial intelligence and other high-performance computing (HPC) workloads, data centers’ energy demand between 2024 and 2030 is estimated to rise by 160%, while the overall global demand for power is also estimated to increase by 2.4% annually from 2022 to 2030. As a result, oil demand is expected to peak around 2034, even with alternative energy sources, like electricity, being introduced and becoming widespread. In other words, oil and gas will continue to not just be used, but increase in demand to support new power-hungry technology. Continuing at the rate of waste would be a massive loss.

That’s where Crusoe comes in. Crusoe is a cloud computing company with a mission to “align the future of computing with the future of the planet”. Using a patented Digital Flare Mitigation System, the company captures stranded gas from oil flare sites that would otherwise be wasted and converts it into usable energy to power its data centers. Through this process, the environment is spared from, on average, 63% of the carbon dioxide and methane emissions produced by traditional flaring. Crusoe then builds mobile data centers directly at flare sites. These data centers are modular so as power production rises and falls, Crusoe is able to relocate them. By transporting data instead of power, Crusoe can provide reduced costs and flexibility to its clients, offering a cheaper, cleaner cloud platform for their AI and HPC needs.

Source: CoinDesk

Crusoe was founded by Chase Lochmiller (CEO) and Cully Cavness (COO) in 2018 in Denver, Colorado.

Lochmiller received his bachelor’s degree in math and physics from MIT in 2008, and his master’s in computer science from Stanford in 2016, where he specialized in artificial intelligence. He began his career as a quantitative trader at Jump Trading, then left the finance industry to spend six months climbing five of the world’s seven tallest summits. He cites this experience as formative in his entrepreneurial thinking. After returning to Colorado from mountain climbing, Lochmiller went on a trip with his high school classmate, Cully Cavness.

Cavness graduated in 2010 from Middlebury College, a school famous for its emphasis on sustainability and environmental activism, with a bachelor’s in geology. Furthermore, in 2010, he was awarded the Thomas J. Watson Fellowship, through which he completed a year of study abroad regarding energy economics in Europe. From 2010 to 2013, he worked for Recurrent Engineering where he was involved in the development of geothermal, solar thermal, and industrial waste heat power projects. Afterward, from 2015 to 2016, Cavness was an associate in energy investment banking.

Together, Lochmiller and Cavness set out to solve the problem of gas “flaring”, a harmful industry practice of burning excess natural gas emitted in the oil drilling process. The process of drilling for oil yields three outputs: oil, natural gas, and water. After separation, the water and oil can easily be transported to treatment facilities or refineries, as they are liquids. Managing natural gas, however, is not as simple – being vaporous, it is hard to capture and expensive to transport. As a result, for decades, most oil companies have opted to simply “flare” or burn it. This releases large amounts of carbon dioxide and methane gas into the atmosphere and contributes to nearly 2% of total global greenhouse gas emissions. Moreover, 14.5 billion cubic feet of gas is flared (wasted) globally daily, a volume that could power Sub-Saharan Africa.

This gas, Lochmiller and Cavness realized, was wasted primarily because of the prohibitive costs of transporting it from oil fields to places of energy demand. It's often the most economical solution for oil companies to simply throw out this natural gas, despite the damage and cost. The team realized that if this resource could be captured, it could provide a viable source of energy. With this insight, Crusoe Energy developed a now-patented Digital Flare Mitigation System that could absorb this natural gas and convert it into usable energy. Crusoe could then use this captured power to fuel data centers that could support Bitcoin mining ecosystems. In a proof of concept, the company’s early mobile data centers reduced greenhouse gas emissions at select oil fields by 70%.

In the initial years of Crusoe, the founding team sent a video to potential investors of a gas flare getting smaller as a Bitcoin wallet grew in size. In 2023, the team pivoted from a focus on Bitcoin mining to supporting all HPC workloads – in particular, AI and large language models. To that end, it secured a $200 million loan from investment firm Upper90 in late 2023, with stated plans to use the money to purchase NVIDIA H100 Tensor Core GPUs as well as the previous A100 version. Involvement in the fast-growing demand for energy from AI was a strategic move, believing that the pivot came “at a time when the entire compute infrastructure market is constrained due to burgeoning demand from AI/ML workloads.”

Crusoe Cloud

Crusoe’s primary client-facing product is Crusoe Cloud, a cloud infrastructure platform powered by its mobile data centers. Crusoe Cloud is a scalable, cost-efficient and sustainable platform for businesses to use exclusively on their HPC workloads. In October 2023, Crusoe Cloud announced new capacity including NVIDIA GPUs, which is expected to enhance performance and reliability and provide the “right computational power” for a variety of use cases.

The primary use cases of Crusoe Cloud are AI Exploration, Model Training, and Scalable Inference. One example is the MIT High Energy Physics Research Group using Crusoe to develop machine learning algorithms to analyze data from particle colliders. Avalanche Energy, another client of Crusoe, uses Crusoe Cloud to simulate fusion microreactors.

Source: Crusoe

The primary value proposition of Crusoe for customers is its reduced costs. By installing its mobile data centers at flare sites, Crusoe eliminates the prohibitive natural gas transportation costs, Crusoe also always on “nonrival” power, which is, energy not taken away from the grid that powers homes and businesses. As a result, this power is significantly cheaper than what most leading competitors (namely, Azure and AWS) are forced to pay, a cost reduction Crusoe passes onto their customers.

Secondly, Crusoe’s modular data centers aid in decentralization — rather than drawing all from one single plant, the company is able to disperse its clients’ workloads across several different sites. This means that the inconsistency of available power at any one oil site does not change Crusoe’s capacity to power AI workloads for its clients.

Crusoe Energy Solutions

Additionally, Crusoe offers two patented energy products: Digital Flare Mitigation (DFM) and Digital Renewable Optimization (DRO).

The Digital Flare Mitigation system is a product that captures wasted natural gas from oil fields and converts it into electricity to power on-site data centers.

Source: Crusoe Energy

Crusoe’s Digital Renewable Optimization is a similar system but designed to operate on carbon-free, renewable power resources like wind, solar, and geothermal sources.

Source: Crusoe Energy

These products are both offered as partnership agreements with oil and gas field operators and companies. These companies are incentivized to partner with Crusoe because the company offers a unique and environmentally-friendly solution to utilizing the natural gas produced by drilling for oil, and furthermore, does so at a reduced cost to the next best solution (flaring).

Source: Crusoe

Customer

Crusoe Cloud focuses primarily on businesses in need of energy-intensive workloads. By limiting its service offerings to customers seeking solutions for their HPC and AI workloads, Crusoe ensures that the lifetime costs of owning its data centers are primarily driven by energy expenditure, rather than hardware or software costs. As of January 2024, the average AI data center spends as much as 60% of its total budget on power and energy.

Additionally, for these clients focused on AI training and inference, millisecond latency precision becomes less important. The time required to run large language models, neural networks, or other AI training workloads is so large that the additional latency required to transmit the data from offsite data centers to personal computers is insignificant. Instead, Crusoe can build its data centers further away from its clients without impacting the speed of computing services delivered. This allows them to take advantage of the abundance of stranded oil fields in rural and undeveloped areas.

Notable customers include Codeium, Playground, and the MIT High Energy Physics Research Group. These customers primarily fall into two major categories: academic and research groups, from the Institute for Artificial Intelligence and Fundamental Interactions (IAIFI) to Avalanche Energy, to corporations like Jua and Codeium.

Source: Crusoe Cloud

Crusoe Energy Solutions, on the other hand, primarily serves oil and gas field operators. This customer base is relatively concentrated, with just eight companies monopolizing over 50% of the oil and gas market, primarily due to the prohibitive costs of owning and operating active oil flare sites. While the industry is traditionally heavily regulated and thus slower to adopt new practices, the 2021 United States flaring reduction tax credit has incentivized several industry leaders to seek out mitigation solutions, creating opportunities for Crusoe to expand their customer base significantly. Notable customers as of 2024 included Equinor, Kraken Oil & Gas, EnerPlus, and Devon Energy.

Market Size

Source: Goldman Sachs

Following the 2022 release of ChatGPT, demand for data center workload increased by 24% in 2023 to more than 1 billion compute instances. As the graph above outlines, while workload demand has been steadily increasing since 2015, the demand for power rose alongside the development of artificial intelligence. In fact, by 2028, AI will represent an estimated 19% of data center power demand. To support this growth, US utilities will need to invest $50 billion to build infrastructure capacity. Furthermore, the International Energy Association estimates that, in 2024, data center power consumption accounted for 2% of global energy consumption, and by 2030, this number will have risen to 8%. This incremental data center power consumption will drive 3.3 billion cubic feet per day of additional natural gas demand by 2030.

However, this data center growth is sometimes considered unsustainable. According to the Electric Power Research Institute, AI searches require 10 times the electricity of traditional Google search queries. A single NVIDIA H100 server (8 H100 carts) running at full load takes the equivalent of 10 US homes worth of power. The expected rise of data center carbon dioxide emissions in the next decade will represent a social cost of $125-140 billion.

Furthermore, clustered data center growth has led to increased electrical grid pressure in areas already operating at-capacity and/or prone to instability, and growing the power grid is impractical: new power takes a minimum of four years to build, creating a substantial lag between computing growth and grid growth.

Thus, sustainable, alternative avenues for power and cloud computing services will benefit from significant industry tailwinds between 2025 and 2030. And by providing an alternative avenue for power without compromising on environmental safety or placing additional pressure on already over-burdened scarcity constraints, Crusoe counter-positions themselves against traditional technology companies who are trying to enter the AI and cloud computing space.

Additionally, the specific verticals that Crusoe primarily operates in are all poised for growth:

Bitcoin Mining: In bitcoin mining, cloud computing software is used for work and cryptographic proofs, which validate transactions on the blockchain. The approximate market size for these services were $1.9 billion in 2022.

Cloud Computing: For computing as an on-demand service, the market size within the United States in 2023 (including low-latency applications, which Crusoe does not typically emphasize) was $500 billion. This is another rapidly growing vertical— in 2024, 94% of all companies use cloud computing as a service, a jump from 14% in 2020.

AI & ML Applications: The AI market is expected to grow from $454 billion in 2022 to $2.5 trillion in 2032, and the global renewable energy market was valued at $881.7 billion in 2020, and is projected to reach $1.977 trillion by 2030.

Source: Precedence Research

Crusoe faces fierce competition from two major sectors: neocloud companies, which provide cloud computing infrastructure to AI groups, and energy companies, particularly those looking for solutions to the environmental concerns of AI power consumption.

Neocloud Competitors

AWS, Google Cloud, & Microsoft Azure:

The cloud compute market is dominated by AWS, Azure, and Google Cloud, three companies that combined accounted for 68% of the $84 billion global cloud market in Q3 2024.

AWS began offering cloud computing services to businesses in 2006 and by 2024 had grown to offer over 200 fully featured services from data centers around the globe. Its parent company, Amazon, is a publicly traded company with a $2.1 trillion market cap as of April 2025, of which AWS accounts for approximately 30%. Like Crusoe, AWS has launched several meaningful sustainability initiatives since 2020. For example, the company now uses advanced cooling techniques to lower the power demands of its data centers.

Similarly, Google and Microsoft are publicly traded companies that launched cloud computing services platforms Google Cloud and Microsoft Azure in 2008. They, too, have explicit sustainability goals regarding their power consumption, with Google attempting to reach carbon neutrality by 2030.

CoreWeave

While much of the cloud compute market share is controlled by these three incumbents, several neocloud startups also pose competitive challenges to Crusoe. CoreWeave, founded in 2017, is a cloud infrastructure company that delivers computing resources tailored for blockchain and other AI projects, featuring a cloud-based production pipeline that allows clients to meet their flexible, scalable compute demands. The company has raised over $13.4 billion through twelve funding rounds as of April 2025, including a debt financing round for $650 million in October 2024 led by Goldman Sachs, JP Morgan, and Morgan Stanley. Other notable investors include Fidelity and Magnetar Capital.

As of April 2025, the company was valued at approximately $30.4 billion and is scheduled for a $35 billion IPO in early 2025. Then, in March 2025, CoreWeave adjusted its expected IPO valuation to $23 billion. Much like Crusoe, CoreWeave benefits from a close partnership with NVIDIA. As one analyst explained in 2023: “Since supply has been limited for a long time, and [CEO of NVIDIA] Jensen is allocating so as to not concentrate all the buying power on a few hyper-scalers, there’s a margin to be made in reselling capacity.” This margin is expected to enable CoreWeave to quadruple its sales in 2025, to around $8 billion.

Core Scientific

Another rival in this neocloud space is Core Scientific, a startup founded in 2017 that went public on the NASDAQ in Q1 2024. Core Scientific operates bitcoin mining data centers and manufactures digital currency mining servers, utilizing its compute capacity to support these power-intensive tasks. In August 2024, the company raised $400 million in a post-IPO debt round with undisclosed lead investors. Like Crusoe, Core Scientific invested heavily in data center buildouts throughout 2023 and 2024, the largest of which is expected to provide a total contract value of over $8.7 billion by 2026.

Energy and Sustainability Companies

In the energy and sustainability sectors, Crusoe primarily faces competition from startups focused on tackling the supply-demand asymmetry of AI computing.

Golem

Golem, for example, is a decentralized computing power marketplace that enables users to buy and sell excess computing power. Founded in 2014, the Switzerland based company had raised $9 million over two rounds of funding as of April 2025, including a seed round in 2016 for $8.6 million, led by Fundamental Labs. Like Crusoe, this platform makes use of underutilized computing power in personal computers and rural data centers to make compute-intensive tasks, such as AI model training, cheaper and more accessible. Furthermore, Crusoe and Golem share a decentralized business model — Crusoe distributes its compute power across its modular data centers, while Golem distributes its power across its users.

Upstream Data

Upstream Data, founded in 2017, pairs modular bitcoin mining data centers with natural gas engines to convert wasted energy into useful work. As of April 2025, it had raised only a seed round, led by Ten31, for an undisclosed amount in 2020. The company is one of the few prominent competitors to Crusoe that deals actively with flared and vented natural gas, but unlike Crusoe, Upstream Data has not pivoted towards supporting AI computing workloads, and remains in the bitcoin mining space.

Crusoe Cloud operates as an Infrastructure as a Service (IaaS) business that offers subscription plans based on the length and capacity of compute power the client requires for their services. The pricing varies, but on average, clients pay roughly $3 per hour per rack per year, paying additional costs for storage and networking functionality.

While the construction of data centers is capital intensive, once built, computing power is a light, flexible asset. For instance, in October 2024, Crusoe announced a $3.4 billion project to construct a large AI data center campus, which, once built, could support 100K GPUs worth of compute, storage, and networking power. In this way, these up-front costs are amortized over the long-term trajectory of the company.

Crusoe Energy Solutions, the company’s other monetization pathway, is offered as a customizable partnership agreement with oil and gas field operators and companies. In addition to an alternate stream of revenue, these partnerships power the modular data centers being built to support Crusoe Cloud. Because natural gas is a depletable, nonrenewable resource, it is possible that in several decades, Crusoe’s operational sites are no longer viable sources of natural gas, and thus the oil and gas companies who own those particular fields will no longer be recurring clients. However, in this case, the modular nature of Crusoe’s data centers will enable them to remobilize with agility.

Source: Crusoe Energy

Crusoe is gaining traction by making strategic partnerships to build out data centers and acquire new customers. In October 2024, the company announced a $3.4 billion joint venture with Blue Owl Capital, an alternative asset manager, to develop the largest data center campus in the United States, reportedly leased by Oracle. This data center is estimated to service several notable customers, including Microsoft and OpenAI. Beyond the United States, Crusoe is expanding into international markets. In January 2024, the company announced a data center expansion in Iceland.

Furthermore, to improve its Cloud product, Crusoe began work in September 2024 alongside VAST Data to deliver Shared Disks, a new cloud storage product that delivers a petabyte-scale file system capable of hundreds of gigabits/second in aggregate read and write performance for training workloads. The company has also launched strategic partnerships with leaders in the chip manufacturing space, such as NVIDIA and Supermicro.

In 2022, Crusoe’s revenue was an estimated $30 million, yielding a revenue multiple of approximately 58x from its April 2022 valuation of $1.8 billion. In 2023, the company grew to an estimated $500 million in revenue, with over $2 billion in contracts for 2024. Furthermore, in the second half of 2022, Crusoe made two major acquisitions: Great American Mining and Easter-Owens Electric.

As of April 2025, Crusoe has raised more than $1 billion of funding, receiving support from Founders Fund, Valor Equity Partners, Ribbit Capital, Mitsui & Co., Bain Capital Ventures, and G2 Venture Partners, among others. In October 2024, Crusoe raised a $600 million Series D at a $2.8 billion valuation.

Renewable Energy Incorporation

With its Digital Renewable Optimization product offering, Crusoe hopes to incorporate renewable energy into its mobile data centers as well. Operating data centers on solely renewable energy has historically been infeasible for providers, due to the inconsistency in wind and sunlight availability in urban areas. However, in remote areas, wind and sun farms face such extreme surpluses that are so common that power is often sold at a negative cost. Because Crusoe is capable of building mobile data centers at these remote locations, it can harness renewable energy using its DRO to power AI and HPC workloads entirely on green energy.

Global Expansion

In 2024, Crusoe announced its data center expansion to Iceland, a country that has 10 data centers in use as of November 2024. Iceland is home to abundant geothermal and hydroelectric energy, providing a sustainable and cost-efficient solution for HPC needs. Thus, by building here, Crusoe is able to capture significant amounts of stranded natural gas at reduced cost while also establishing key footholds in an international market.

Iceland isn’t unique in this regard. Crusoe has stated goals to continue its expansion in Argentina and the Middle East. By pioneering outside of the traditional hubs for AI and technology, like California, Crusoe is able to create environments in which it does not face as much competition from established players like AWS, Azure, and Google. Furthermore, Crusoe is able to benefit from a first-mover advantage and create key partnerships with oil, gas, and AI companies in these emerging markets.

Dependence on the Oil & Gas Industry

Crusoe is poised to operate within two discrete sectors each with their own sizable carbon footprint: the oil and gas industry, and data services. While the data services sector is poised to see growth until 2030, the oil and gas industry may trend in the opposite direction.

The International Energy Agency (IEA) predicts oil declining from around 100 million barrels per day to 77 million barrels per day by 2030. By 2050, this oil demand is projected to decline by an additional 75% to 24 million barrels per day. Not only will this directly impact Crusoe’s profitability by reducing the number of available clients of Crusoe Energy Solutions, but without enough locations to deploy the Digital Flare Mitigation system, the company may struggle to provide low-cost cloud computing power to their cloud customers as well.

Furthermore, natural gas is often touted as a “bridging fuel” — it can serve as a reliable source of power to augment or support less consistent sources, without producing as many emissions as oil and coal. Especially in developing markets like India and China, the abundance and affordability of natural gas give it an advantage over other fuels. However, if the energy transition accelerates, sources of cheap and clean renewable energy may “leapfrog" natural gas, rendering it obsolete and devalued earlier than expected.

Competition

Crusoe operates in a highly competitive market with established players like AWS, Azure, and Google Cloud. These companies have massive resources and are investing heavily in sustainability initiatives, which could challenge Crusoe's market position. Furthermore, switching costs for cloud computing services are high. There are major migration costs for businesses and enterprises to shift from one cloud computing service to another, so those customers already secured by the industry behemoths may be inaccessible to Crusoe as customers.

Additionally, given that this market requires meaningful capital expenditures, and building data centers is an incredibly expensive undertaking, it follows that Crusoe is less well-positioned to expand as rapidly as larger companies with more cash, such as Google, Amazon, and Microsoft.

Furthermore, these competitors also have outsized influence on the strategic direction of policy and legislative decisions made regarding AI.

AI Uncertainty

The AI market, while growing rapidly, is still in its nascent stages, leading to concerns about the sustainability and justification of the immense expenditures required in the current AI buildout.

According to a report by McKinsey, global corporate investment in AI surged to an estimated $327.5 billion in 2022. Despite this influx of funding, fewer than 25% of these organizations reported significant financial returns from AI adoption. Furthermore, only 17% of companies with advanced AI capabilities report achieving scalability, suggesting that many projects remain in experimental phases without translating into broad organizational benefits. This underscores that the long-term viability of the current AI investment pace and fervor remains unproven, particularly as frameworks for ethical and regulatory concerns evolve. David Gray Widder, an AI researcher at Cornell University, warns against the “AI hype” leading to over-investment in speculative technologies that parallel the dot-com bubble of the early 2000s.

Crusoe is a company focused on utilizing computing as a mechanism to reduce emissions in oil and gas industries by utilizing excess natural gas from oil and gas operations to power AI and HPC workloads. Crusoe captures flared natural gas—gas that would otherwise be wasted through burning—and converts it into energy to run mobile data centers deployed directly at oil fields. This model allows the company to offer an environmentally friendly solution by reducing carbon emissions while providing energy for high-performance computing and artificial intelligence training models.

Beyond cloud compute services, Crusoe provides energy solutions. The company's DFM system transforms environmental waste into useful computational power, thus addressing both energy inefficiency and the environmental impact of flaring. In the future, Crusoe hopes to use its DRO system to supply power-intensive computing services on entirely clean energy.

Ultimately, Crusoe is working to respond to the increasing power demands of data centers that are quickly becoming both an environmental and financial impossibility. Its mission and operations align with broader efforts to reduce waste in the oil and gas industry and promote sustainability through innovative energy solutions.