00:00Crusoe CEO Chase Lockmiller back with us on Bloomberg Tech. This round has been in the
00:04works a while. It's a big round, a vote of confidence. And I think the participants are
00:09super interesting as well, Chase. Let's talk about the capital need, you know, what it is
00:14you're going to be able to get going on now. Absolutely. So, you know, thanks for having me
00:19on the show. First of all, Ed, always great to see you. You know, this round was an exciting
00:24moment in the culmination of just an incredible amount of hard work for many years across
00:29the Crusoe team. And, you know, it's really been an onus on the company and the whole industry
00:36to really dig deep and really work hard to, you know, deliver the infrastructure layer of
00:43intelligence. You know, the capital needs are really tremendous for what's happening. And
00:49because of that, because of that, you know, and the value creation potential is really
00:55enormous in terms of, you know, what AI is going to do to transform the global economy.
01:00And that's really why the capital is being driven to the sector.
01:03Chase, people are familiar with Crusoe, probably because of the relationship with Oracle, the
01:09relationship with OpenAI. But if we really scale it back to simple terms, you help build
01:14data centers and you also have your own cloud computing platform now. Could you just explain
01:19that split? Yeah. So Crusoe is a vertically integrated AI infrastructure platform that,
01:25you know, helps manage infrastructure from the electron to the token. So this is both
01:29building, operating and energizing these large scale AI factories and then building software
01:35to operate these AI factories, which is the Crusoe cloud platform. So, you know, you really
01:40think about what we deliver to our customers can be a data center in the case of, you know, how
01:44we've worked with Oracle and Microsoft and a number of other big customers. It can be a
01:49managed compute cluster, which is what we're doing with folks like Perplexity and Figure and a number
01:55of other key AI innovators. And it can also be managed services and managed intelligence, which is
02:01what we're doing with delivering our Crusoe managed inference platform and some of our other services
02:06like serverless fine tuning. Chase, with those kind of three buckets you just outlined, what's the
02:12percentage of sales for each currently? And how is Crusoe's business kind of shifting in terms of
02:19the mainstay of what you do? Well, you know, each of those different businesses, each of those
02:24different ways of sort of serving customers, they typically have different durations. So when folks
02:31are making data center commitments to us, we're typically working with very large tech companies that
02:36have investment grade credit ratings, and they're typically committing to us, you know, for somewhere
02:40between 15 and 20 years. They're multi-decade long commitments. You know, when you think about
02:46the life cycle of a GPU and the managed compute clusters, those can range anywhere from, you know,
02:50a few months to, you know, five to six years, but they're typically don't go beyond that just because
02:55that's sort of the life cycle of the chips. And then when you think about managed inference and
03:01managed AI services, those are more, you know, they're developer tools, it's building in the
03:06developer ecosystem. So they're more on demand. You know, there are commitments that folks are
03:11making, but they're typically shorter term in nature as they're scaling their AI applications
03:16and the actual utilization of these services. So, you know, it sort of offers a broad spectrum
03:23of services that we can offer the industry, as well as a broad spectrum of contracts and revenue
03:29resources that we're receiving as a business. You've added three important names as board members
03:35and looking at the round, you know, the size, the participants, a lot of people asking if this is kind
03:41of a precursor to you, Chase, taking Crusoe on a path to the public markets and an IPO.
03:48Yeah, so we've been thrilled to add, you know, when we think about Crusoe, you know, really the three
03:52core pillars of the business are energy data centers and AI cloud computing. You know, the three
03:59board members we added, you know, J.B. Strobel, who was the co-founder and CTO of Tesla, who's one
04:05of
04:06the most brilliant energy minds of our generation. He's joined our board, you know, on the energy side.
04:12You know, Bill Stein is widely considered to be sort of the godfather of the data center industry,
04:17and he's become, you know, a dear friend and a great mentor for me and, you know, has helped Crusoe
04:23grow quite a bit. He's joined our board that, you know, really represents that data center pillar.
04:27And then Thomas Seifert, you know, has been the longtime CFO of, you know, one of the most
04:32successful cloud companies of all time, which is Cloudflare. And Thomas brings a tremendous amount
04:37of, you know, financial knowledge and expertise and has joined us as our audit chair and board
04:41member. So, you know, as we think about the public markets, you know, look, it's something we're
04:46always, you know, considering, you know, what the best ways are to capitalize Crusoe's growth. We are
04:51seeing tremendous demand from, you know, across our suite of customers. And we do have, you know,
04:57massive ambitions to continue to grow this vertically integrated AI infrastructure platform.
05:02So, you know, I think, you know, at some point, it probably does make sense for us to enter the
05:06public market, but it is kind of something that we're constantly evaluating.
05:11Chase, I respect that Crusoe's business is not just in the United States, right? You are looking at the
05:16Gulf, for example, in other regions. But right now in America, data center is not necessarily a good
05:23word, a good phrase. You know, we have the midterms approaching where there are a number of races
05:27where data centers are an issue for voters. In Texas, in particular, you have a big footprint in
05:33Texas and Governor Abbott has this sort of moratorium. Abilene's the big one for you. It doesn't seem like
05:39that's impacted. But talk about the general attitude towards data centers in this country. And if you are
05:45seeing any negative impact because of the political environment right now.
05:50Yeah. So, you know, we've been sort of, you know, working with the local communities where we are
05:57partnered. I think more than anything, the data center industry has sort of a marketing issue.
06:02You know, we are seeing a lot of information that's just, you know, frankly, not accurate. I think
06:07that the benefits that we provide the communities and the partnership that we take when we're building
06:13in those communities is not always being properly communicated. So, you know, I think the water
06:18narrative, for instance, is a great example of this where, you know, there's this narrative out
06:22there that data centers are consuming and using tons and tons of water. And, you know, the way we've
06:28designed and engineered these next-gen purpose-built AI factories is really to not use any water,
06:34use hardly any water. Each of our big buildings in Abilene, Texas, uses roughly the same water
06:40footprint as about 10 single-family homes. So you're talking about, you know, basically water
06:44usage from people going to the bathroom, you know, watering our plants, you know, just general
06:48purpose usage. But the water to cool the chips, that's actually operating on a closed-loop system.
06:53So you have cold water that goes into the racks and it gets cooled off in these, you know, air
06:58-cold
06:58chillers outside of the data center. You know, and from a job creation perspective, you know, these can be
07:04transformative for these communities. And from a tax revenue perspective, you know, they can also be
07:09transformative as well. You know, you look at a market like Abilene, you know, will be about a
07:12third of the total tax base in Abilene and Taylor County. You know, and, you know, we're more than
07:19doubling the annual receipts for the local school system. And, you know, another area where we're
07:28building in Texas, you know, a large campus is Armstrong County, where we're increasing the, you
07:33know, the tax revenue by over 100%. So, you know, these are massive transformational investments
07:40that really lead to these larger budgets that, you know, the communities can invest in long-term
07:45infrastructure, in services, like, you know, the police, the fire department, the roads, and then
07:51obviously the education for the future generations of children. But Chase, there's no specific projects
07:57that have been delayed or impacted or paused because of local policy or opposition.
08:04Not yet. But, you know, we're definitely seeing it happen and unfold in real time. So,
08:10you know, it's something that we're trying to get ahead of. And, you know, really, we think that the
08:15truth is on our side. And as people, you know, really get to understand the type of partner that
08:20Crusoe is, you know, we think that, you know, we can be really great partners to local communities
08:26where we're investing for, you know, multiple decades to come.
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