The Money Game

Author: themoneygameadmin

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  • $500M Invested in the Newest Neocloud Company

    $500M Invested in the Newest Neocloud Company

    Big idea:

    • Crusoe Energy, a data center start-up, is raising $500 million in equity capital led by Peter Thiel’s Founders Fund. This new fund values the company at approximately $3 billion, more than double its valuation two years ago.

    Why it matters:

    • This fundraising highlights the growing investment in AI infrastructure, driven by the demand for advanced, AI-powered data centers. Tech companies continue to seek well-developed infrastructure to support machine learning and other resource-intensive applications.

    Key details:

    • Crusoe Energy was founded in 2018 by Chase Lochmiller, a quantitative trader, and Cully Cavness, an energy investment banker.
    • Founders Fund, an early Crusoe investor, led the $500 million round, raising the company’s valuation to approximately $3 billion.
    • Crusoe initially focused on harnessing oilfield waste gasses for energy-intensive computing tasks but shifted to building more permanent data center facilities in 2020.
    • The recent funding round comes alongside a $3.4 billion joint venture with Blue Owl Capital and Primary Digital Infrastructure to build a new data center in Texas. This data center will be leased to Oracle.

    What’s next:

    • The ‘Neocloud’ sector will gain traction as companies increasingly look to provide a differentiated service from traditional hyperscalers. 
    • Crusoe will use the new funds to improve its facilities and expand its capacity to support AI workloads.
    • Will monitor how real estate-like data infrastructure development projects are separated from the operational GPU cloud owned by Crusoe. The best Neoclouds will be the strongest cloud operators.

    Proof points: 

    • Over 40% of the $93 billion spent by venture capitalists in early 2024 was directed towards AI start-ups.
    • CoreWeave, a leading neocloud company, has raised over $12 billion in debt and equity in the past 18 months, highlighting the growing investment trend in AI infrastructure.
    • Crusoe raised $200 million in debt from Upper90 last year using Nvidia chips as collateral. This capital was used to buy thousands of Nvidia’s H100 GPUs, strengthening its AI cloud capabilities.