Crusoe, Blue Owl Capital and Primary Digital Infrastructure Enter $3.4 billion Joint Venture for AI Data Center Development

Rhea-AI Summary

Crusoe Energy Systems, Blue Owl Capital, and Primary Digital Infrastructure have announced a $3.4 billion joint venture to fund a 206 MW AI data center at the Lancium Clean Campus in Abilene, Texas. The project, designed and operated by Crusoe, is 100% long-term leased to a Fortune 100 hyperscale tenant with occupancy expected in 1H 2025.

The data center will be capable of supporting up to 100,000 GPUs on a single integrated network fabric, optimized for direct-to-chip liquid cooling and air cooling. The project aims to use both on- and off-site renewable energy sources, aligning with Crusoe's climate-focused mission. It's estimated to contribute nearly $1 billion to the local economy over 20 years and create almost 100 local jobs.

Positive

• Joint venture secures $3.4 billion in funding for AI data center development
• 206 MW data center is 100% long-term leased to a Fortune 100 hyperscale tenant
• Data center designed to support up to 100,000 GPUs for advanced AI workloads
• Project expected to contribute nearly $1 billion to local economy over 20 years
• Creation of almost 100 local jobs in Abilene, Texas

Negative

• None.

Insights

Financial Analyst

This $3.4 billion joint venture between Crusoe, Blue Owl Capital and Primary Digital Infrastructure marks a significant investment in AI data center infrastructure. The deal involves developing a 206 MW, 998,000 square foot data center in Abilene, Texas, fully leased to a Fortune 100 hyperscale tenant. Key points:

• The project is fully funded and expected to be operational by 1H 2025
• Designed to support up to 100,000 GPUs for AI workloads
• Estimated to contribute $1 billion to the local economy over 20 years
• Creates nearly 100 local jobs

For Blue Owl Capital (OWL), this venture aligns with the growing demand for AI infrastructure and cloud computing. It demonstrates the company's ability to deploy significant capital in high-quality, future-focused assets. The long-term lease to a major tenant provides stable cash flow potential. However, investors should consider the rapid pace of technological change in AI and potential risks associated with large-scale, single-tenant projects.

Tech Expert

This data center project pushes the boundaries of AI infrastructure design and scale. Notable technical aspects include:

• Direct-to-chip liquid cooling capability, optimizing for high-density AI workloads
• Integrated network fabric supporting up to 100,000 GPUs
• Flexibility to accommodate both liquid and air cooling

The scale and design innovations position this facility at the forefront of AI compute infrastructure. It's tailored for intensive AI training and inference tasks, which are increasingly critical for tech giants and research institutions. The focus on energy efficiency and renewable power aligns with industry trends towards sustainable high-performance computing. This project could set new standards for AI data centers, potentially influencing future developments in the field. For investors, it represents a strategic bet on the continued growth and evolution of AI technology demands.

The Build-to-Suit 200+ MW AI Data Center Capacity Developed by Crusoe is Located at Lancium Clean Campus Site Abilene, Texas

SAN FRANCISCO & NEW YORK & AUSTIN, Texas--(BUSINESS WIRE)-- Crusoe Energy Systems LLC (“Crusoe”), a vertically-integrated AI infrastructure company, Blue Owl Capital Inc. (“Blue Owl”), a leading alternative asset manager, and Primary Digital Infrastructure, an advisory and investor firm focused in the data center industry, announced today a $3.4 billion joint-venture to fund purpose-built data center capacity at the previously announced Lancium Clean Campus in Abilene, Texas. Under the terms of the fully funded forward takeout, funds managed by Blue Owl’s Real Estate platform and Primary Digital Infrastructure will jointly sponsor the 206 MW 998,000 square foot data center being designed, built, and operated by Crusoe.

The Crusoe AI data center is a build-to-suit, two-building data center constructed to industry leading efficiency and reliability standards, and capable of supporting high energy density IT applications. The project is 100% long-term leased to a Fortune 100 hyperscale tenant with occupancy expected to begin in 1H 2025. Supported by Blue Owl’s investment and developed by Crusoe, the project will incorporate an innovative DC design, sharpened to support cutting edge AI workloads at an industry-leading scale. The design will be optimized for direct-to-chip liquid cooling and will also accommodate air cooling. At completion, the data center will be able to operate up to 100,000 GPUs on a single integrated network fabric, advancing the frontier of data center design and scale for AI training and inference workloads.

“Rapidly expanding demand for purpose-built data centers proves that markets know the future will be powered by AI,” said Chase Lochmiller, CEO and co-founder of Crusoe. “We've designed this data center to enable the largest clusters of GPUs in the world that will drive new breakthroughs in AI. An investment of this magnitude from a leading, trusted asset manager like Blue Owl and Primary Digital Infrastructure is a reflection of Crusoe’s proven ability to meet growing demand for AI compute, and to power these workloads sustainably.”

“We are thrilled to be part of this joint venture as we see continued growth in cloud computing and increased investor interest in AI related technologies. We want to assist our corporate partners by deploying meaningful capital in support of high quality hyperscale data center assets across the US and abroad,” said Marc Zahr, co-president and global head of real estate at Blue Owl Capital.

“There is an unprecedented opportunity to deploy capital in the data center market, which is expected to experience a one trillion dollar investment boom over the next four to five years in the U.S. alone. Our strategic vision is to ‘risk match’ this incremental capital by purchasing the best stabilized assets from developers and operators to allow them to recycle capital and finance their cloud and AI facility developments,” said Bill Stein, executive managing director and chief investment officer, Primary Digital Infrastructure and current Crusoe advisor. “By partnering with Blue Owl and Crusoe, Primary Digital Infrastructure is leveraging its deep sector expertise to provide flexible capital solutions to the largest AI data center opportunities in the US. In this transaction, Primary Digital Infrastructure helped combine Blue Owl’s extensive capital access and transactional expertise with Crusoe’s ESG-forward track record as a developer and operator to quickly and efficiently create one of the nation’s most advanced data centers for energy dense AI workloads.”

The 200+ MW capacity will be delivered by Crusoe in 2025 on a record-setting construction timeline. This speed is achieved through Crusoe’s innovative design strategies and intimate familiarity with the GPUs and other integral AI hardware that will outfit the site.

The notional power plan for the site includes both on- and off-site renewable resources, including surrounding wind developments, and a potential future large-scale onsite solar installation. The goal is to optimize existing renewable power resources and incentivize new greenfield renewable power development. The availability of low-carbon energy factored heavily into site selection, as it is central to Crusoe’s climate-aligned mission and energy-first approach to powering AI infrastructure.

The project is expected to contribute nearly $1 billion to the local economy over the next 20 years, as estimated by the Development Corporation of Abilene, and will focus on local hiring, creating almost a hundred local jobs. Combined with its limited environmental impact due to the proposed use of renewable energy, this project reflects Crusoe’s commitment to lead the industry in sustainability and community stewardship.

Newmark served as advisor to the partnership.

About Crusoe Energy Systems LLC:

Crusoe is on a mission to align the future of computing with the future of the climate. As builders and operators of clean computing infrastructure, Crusoe reduces both the costs and the environmental impact of the world’s expanding digital economy. By utilizing clean sources of energy to power artificial intelligence, crypto, and other high-performance computing applications, Crusoe is creating a future of sustainable innovation.

To learn more, visit https://crusoe.ai/ and follow Crusoe on Linkedin and X.

About Blue Owl Capital Inc:

Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.

With over $192 billion in assets under management as of June 30, 2024, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 820 experienced professionals, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.

About Primary Digital Infrastructure

Primary Digital Infrastructure provides flexible, repeatable financing solutions that allow data center operators to unlock precious liquidity from existing assets and achieve their development objectives. Primary Digital Infrastructure’s mission is to ‘risk match’ this incremental capital by purchasing the best stabilized assets from developers and operators to allow them to recycle capital and finance their pipelines. Primary Digital Infrastructure is dedicated to an operator-centric model that allows the best data center developers and owners to recycle capital with as little friction as possible. Established by industry leaders Bill Stein, David Ferdman, Peter Hopper, and John Sheputis, Primary Digital Infrastructure provides capital to premier data center owners and operators through a range of financial solutions including recapitalizations, outright purchases, and forward takeouts. To learn more, visit https://primaryinfra.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241015910376/en/

Media Contacts:

Crusoe:

Sara Axelrod

Senior Director, Public Affairs

saxelrod@crusoeenergy.com



Blue Owl:

Nick Theccanat

Principal, Corporate Communications & Government Affairs

Nick.Theccanat@blueowl.com



Primary Digital Infrastructure:

Carol Hickins

Public Relations

press@primaryinfra.com

Source: Crusoe Energy Systems LLC

FAQ

What is the value of the joint venture for Crusoe's AI data center in Abilene, Texas?

The joint venture between Crusoe Energy Systems, Blue Owl Capital, and Primary Digital Infrastructure is valued at $3.4 billion for the AI data center development in Abilene, Texas.

What is the capacity of the AI data center being developed by Crusoe in Abilene?

The AI data center being developed by Crusoe in Abilene, Texas, will have a capacity of 206 MW and cover 998,000 square feet.

When is the Crusoe AI data center in Abilene expected to begin operations?

The Crusoe AI data center in Abilene is expected to begin operations in the first half of 2025.

How many GPUs will the Crusoe AI data center in Abilene be able to support?

The Crusoe AI data center in Abilene will be able to operate up to 100,000 GPUs on a single integrated network fabric.

What is the estimated economic impact of Crusoe's AI data center project in Abilene?

The Crusoe AI data center project is expected to contribute nearly $1 billion to the local economy in Abilene over the next 20 years.