00:00Well, let's start with your partnership right here in Texas, and Abilene, bring us up to date on Stargate.
00:05How much you have online right now?
00:06Yeah, so we've been investing very heavily in the state of Texas.
00:11Abilene has been, you know, one of our marquee campuses that we've been building out.
00:15Wait, hang on. Sorry, guys. Can we start again?
00:18Yeah, my bad. Sorry about that. No, it was me.
00:21Okay.
00:22All right.
00:24Okay, good to go. Okay, thanks.
00:26Hi, I want to start with your partnership right here in Texas.
00:29Bring us up to date on Stargate. How much you have online right now?
00:33Cool, yeah. Thrilled to be here.
00:35Texas has been such a great partner to Crusoe as we've built out AI infrastructure for the future,
00:40with Abilene being sort of the marquee campus in that portfolio.
00:45Today, you know, we sort of started this in two phases.
00:48The first phase was the first two buildings of the Abilene campus,
00:53which are each about 103 megawatts of IT load, 140-some megawatts of total power capacity.
01:01Those two are fully online and operational.
01:03A second phase started in February of 2025,
01:06and a lot of that capacity is being energized as we speak,
01:10with the expectation of it being fully energized later this year.
01:13With all this work, what about the supply chain?
01:17Are you concerned about how the Iran war will affect that right now?
01:21You know, the Iran war hasn't really impacted our supply chain super dramatically.
01:27I think, you know, we're grateful to be building in Texas,
01:31which, you know, has a lot of energy independence,
01:35and we have been able to get the power needed to energize the campus.
01:43I think the bigger supply chain constraint for us, frankly, is labor.
01:47You know, as we're building very big here in Texas,
01:50both at Abilene as well as a number of other campuses,
01:53and many others are building in Texas and across the United States,
01:57you know, there's been a huge pinch on critical trades,
02:01things like electricians.
02:03Trying to find, you know, the folks that are helping us bring these data centers to life
02:06has been a very critical challenge in our overall supply chain process.
02:10Plumbers, when we're building these big data centers,
02:13there's giant water cooling systems that feed through the data center to cool the chips,
02:18requiring a lot of, you know, expertise in plumbing,
02:20and finding those plumbers to work with us is a challenge.
02:24You know, we did a story on this at one point,
02:26what the incentives are actually to get people to come move here
02:30and live in these areas while they build this.
02:33Yeah, we've definitely tried to attract folks by, you know, increasing the financial incentives.
02:39And, you know, I think there's very lucrative pay packages that people can benefit from
02:44for being a part of and helping stand up this infrastructure of intelligence.
02:49And, you know, sometimes it requires relocation to markets like Abilene,
02:54but, you know, we think that we're able to compensate people in a really generous and fair capacity.
02:59And the work is super important.
03:01In a state where we're seeing more and more data centers,
03:05how much are you tapping from the grid?
03:07I know you know this is a very big deal here in the state of Texas
03:10because there have been grid problems in the past.
03:12Yeah, so we try to be as thoughtful of a partner as we can to the grids and the markets
03:17that we operate in.
03:18Texas is no different.
03:19You know, we try to bring online generation that's needed to support our workloads
03:25as well as working with the grid to be able to take existing capacity that, you know,
03:32is not negatively impacting other local rate payers.
03:36So in the case of Abilene, you know, we actually built a gas plant on site,
03:40about a 350-megawatt gas plant,
03:41to help support the load and generation requirements needed to power that AI factory.
03:48There's other sites where we've brought online a lot more energy behind the meter
03:52between wind, solar, batteries, as well as gas generation to help support the on-site utilization
03:57and actually provide more energy to the market than we're actually consuming on an average basis.
04:03So we believe it's actually an incredible opportunity to catalyze new generation
04:07that both supports our needs as well as brings down costs for local rate payers
04:14by actually having this abundance of energy.
04:16Obviously, the war in Iran has affected the landscape when it comes to oil and when it comes to power.
04:21Are there concerns that there will be fewer AI investments here with the ongoing global tension?
04:27If anything, I think more investments are going to happen here.
04:29I think, you know, there was a lot of excitement about investing in big AI data centers in the Middle
04:35East.
04:35I think a lot of that, you know, with some of the drone attacks that we saw at the AWS
04:40data center, for instance,
04:42you know, I think some of that excitement is tempered and people have shifted that investment and said,
04:46you know what, do we really need to be building these large, you know,
04:49very, very expensive GPU data centers in an area that has, you know, this local conflict?
04:54Or should we be focusing those efforts in more stable economic areas like the United States?
04:59So you think this could actually be an area of opportunity for you?
05:03You know, there's always opportunities in any situation.
05:06So I do think that this is going to, you know, the demand is not going anywhere.
05:11And so, you know, the investments in the infrastructure are going to need to be made,
05:17whether it's in the Middle East or Europe or the United States.
05:20You know, we know they're going to happen and we think we can be a big part of, you know,
05:24helping make those a reality.
05:25Since this has been an area of such demand,
05:28do you hear anything from investors that they're concerned this could fall off
05:32and they won't see the expected returns?
05:35It's definitely something folks are thinking about.
05:38And in a lot of ways, like, I feel like my job as CEO of Crusoe is to be a
05:43thoughtful financial engineer
05:44in terms of how all of these processes unfold,
05:47both in the capital required to build these things,
05:50as well as the engineering of the contracts and the offtake arrangements
05:53and the credit side of this, that really enables the capital formation to happen.
05:58In our case, with some of our bigger contracts,
06:00they're typically fully guaranteed by investment-grade offtake for, you know, many, many years.
06:06So, you know, 15 to 20 years of offtake.
06:09And, you know, with that, you know, financial guarantee from investment-grade counterparties,
06:15people have gotten pretty comfortable with the investment.
06:17I want to let you – I want to ask you before you go.
06:19Last year, legislators told data centers they had to curtail their use during peak periods of stress.
06:25That's Senate Bill 6.
06:26Summer's coming.
06:27What does that look like for you?
06:29Well, look, I think this is a great opportunity for data centers to work closely with utilities
06:37and local communities with things like curtailment because, you know, there are things that we can do to curtail.
06:44And, you know, the White House has put together this executive order that is trying to push for a 60
06:52-day accelerated review process
06:55that would involve data centers having some amount of curtailability in the event of grid strain.
07:02And we think that's a net positive because ultimately it helps us get the power that we need today
07:07without having to wait in a six-year load study with, you know, and what we pay for that is
07:15actually giving up some amount of flexibility,
07:16which we can engineer around between batteries, on-site generation, and curtailment of the actual workload in the data center.
07:23So it's something we're thinking through a lot right now and how we work with our customers in terms of
07:29management of the AI workload
07:31to meet the needs and the flexibility that's being required by utilities under these moments of heavy grid strain.
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