Crusoe CEO: Data Center Indusry Has a 'Marketing Issue’

0:00 CEO, Chase Lochmiller, back with us on Bloomberg Tech. This round has been in in the works a while. It's a it's a big round, a vote of confidence, and I think the participants are super interesting as well, Chase. Let let's talk about the capital need. You know, what it is you're gonna be able to get going on now. Absolutely. So, you know, thanks for having me on the show, first of all, Ed. Always great to see you. You know, the this this round was an exciting moment and the culmination of just an incredible amount of hard work, for many years across, you know, the the the Crusoe team. And, you know, it's it's really, been a been, an onus on on on the company and the whole industry to really dig deep, and and really work hard to, you know, deliver the infrastructure layer of intelligence. Right. You know, the the the capital needs are are are really tremendous for for for what's happening. And and and because of that because of the you know? And and the the value creation potential is is is really enormous in terms of, you know, what AI is gonna do to transform, the global economy, and and that's really why the capital is being driven to the sector.

1:03 Chase, people are familiar with Crusoe. I mean, probably because of of the relationship with Oracle, the relationship with OpenAI. But if we if we really scale it back to simple terms, you help build data centers, and you also have your own cloud computing platform now. Could you just explain that split? Yeah. So Crusoe is a vertically integrated AI infrastructure platform that, you know, helps manage infrastructure from the electron to the token. So this is both building, operating, and energizing, these these large scale AI factories and then building software to operate these AI factories, which is the Crusoe cloud platform. So, you know, you really think about what we deliver to our customers can be a data center in the case of, you know, how we've worked with Oracle and, and and Microsoft and a number of other big big customers. It can be a managed compute cluster, which is what we're doing with folks like Perplexity and Figure and a number of other key AI innovators. And it can also be managed services and managed intelligence, which is what we're doing doing with delivering our AccruSil managed inference platform and and some of our other services like serverless fine tuning.

2:08 Chase, with with that those kind of three buckets you just outlined, what's the kind of percentage of sales for each currently, and how is Crusoe's business kind of shifting of of the in terms of the mainstay of what you do? Well, you know, each of those different businesses, each of those different ways of of sort of serving customers, they they typically have different durations. So when when folks are making data center commitments to us, we're typically working with very large tech companies that have investment grade credit ratings, and they're typically committing to us, you know, for somewhere between fifteen and twenty years. They're they're multi decade long commitments. You know, when you think about the life cycle of a GPU and the managed compute clusters, those can range anywhere from, you know, a few months to, you know, five to six years, but they're typically don't go beyond that just because that's sort of the the life cycle of of the chips. And then when think about managed inference and managed AI services, those are more, you know, they're developer tools or it's building in the developer ecosystem. So they're more on demand. You know, there are commitments that folks are making, but they're typically shorter term in nature, as they're scaling their AI applications and and the actual utilization, of these services. So, you know, it sort of offers a a broad spectrum of services that we can offer the industry, as well as a broad spectrum of contracts and revenues resources that that we're receiving, as a business.

3:33 You've added three important names as board members. And looking at the round, you know, the size, the participants, a lot of people asking if this is kind of a precursor to you, Chase, taking Crusoe on a path to the public markets and an IPO. Yes. So we've been thrilled to add you know, when we think about Crusoe, you know, really the the three core pillars of the business are energy, data centers, and and AI AI cloud computing. You know, the three board members we added, you know, J. B. Stroudhel, who was the cofounder and CTO of of Tesla, who's one of the most brilliant energy minds of our generation. He's joined our board, you know, on the energy side. You know, Bill Stein is is widely considered to be sort of the godfather of the the data center industry, and he's become, you know, a dear friend and a and a great mentor for me and and, you know, has helped Crusoe grow quite a bit. He's joined our board that, you know, really represents that data center pillar. And then Thomas Seaford, you know, has been the longtime CFO of, you know, one of the most successful cloud companies of all time, which is Cloudflare. And Thomas brings a tremendous amount of, you know, financial knowledge and expertise and has joined us as our audit chair and and board member. So, you know, as we as we think about the public markets, you know, look, it's something we're always, you know, considering, you know, what the best ways are to capitalize Crusoe's growth. We are seeing tremendous demand from, you know, across our our suite of customers, and we do have, you know, massive ambitions to continue to grow, this this vertically integrated AI infrastructure platform.

5:02 So, you know, I I think, you know, at some point, it it probably does make sense for us to enter the public market, but it is it is kinda something that we're we're constantly, evaluating. Chase, I I respect that that Crusoe's business is not just in The United States. Right? You are looking at The Gulf, for example, in other regions. But right now in America, data center is not necessarily a good word, a good phrase. You know, we have the midterms approaching where there are a number of races where data centers are an issue for voters. In Texas, in particular, you have a a big footprint in Texas, and governor Abbott has this sort of moratorium. Abilene's the big one for you. It doesn't seem like that's impacted, but talk about the general attitude towards data centers in this country and and if you are seeing any negative impact, because of the political environment right now.

5:50 Yeah. So, you know, we've we've been, sort of, you know, working with the local communities where we are partnered. I I think more than anything, the data center industry has has sort of a marketing issue. You know, we we we we are seeing a lot of information that's just, you know, frankly not accurate. I think that the benefits that we provide the communities and the partnership that we take, when we're building in those communities is not always being properly, communicated. So, you know, I think the water narrative, for instance, is a great example of this where, you know, there's this there's this narrative out there that data centers are consuming and using tons and tons of water. And, you know, the way we've designed and engineered these next gen purpose built AI factories is really to to to not use any water or use use hardly any water. Each of our big buildings in Abilene, Texas uses roughly the same water footprint as as about 10 single family homes. So you're talking about, you know, basically water usage for people going to the bathroom, you know, watering our plants, you know, just general purpose usage. But the water to cool the chips, that's actually operating on a closed loop system. So you have you have cold water that goes into the racks, and and and it gets cooled off in these, you know, air cooled chillers outside of the data center. You know? And and and from a job creation perspective, you know, these can be transformative for these communities. And from a tax revenue perspective, you know, they can also be transformative as well. You know, you look at a market like like Abilene, you know, will be about a third of the, total total tax base in Abilene and and Taylor County. You know? And, you know, we're we're we're more than doubling the, the annual receipts for for the the the local school system. And, you know, another area where we're building in Texas, you know, a large campus is Armstrong County, where we're more than we're we're increasing the the, you know, the tax revenue by by over a 100%. So, you know, these are massive transformational investments that that that really lead to these these larger budgets that, you know, the communities can invest in long term infrastructure and services, like, you know, the police, the fire department, the roads, and then obviously the education for the future generations of children.

7:54 But, Chase, on on there's no specific projects that have been delayed or or impacted or paused because of local policy or opposition? Not yet. But, you know, we're definitely seeing it happen, and unfold in real time. So Right. You know, it's something that we're trying to get ahead of. And, you know, really, we think the the truth is on our side. And as people, you know, really get to understand the type of partner that Crusoe is, you know, we we think that, you know, we we can be really great partners to local communities where we're investing for, you know, multiple decades to come.