$3.4B Joint Venture Funds AI Data Center Development
Crusoe Energy Systems has formed a $3.4 billion joint venture with Blue Owl Capital and Primary Digital Infrastructure to fund the development of a 206 MW data center outside Abilene, Texas. The developer had announced the purpose-built project taking shape at the Lancium Clean Campus in July.
Funds managed by Blue Owl’s Real Estate platform and Primary Digital Infrastructure will jointly sponsor the 988,000-square-foot, two-building data center being designed, developed and operated by Crusoe. Newmark served as advisor to the partnership. Primary Digital Infrastructure is an advisor to Crusoe.
Data center details
The data center will be a build-to-suit facility capable of supporting high energy density IT applications. The project will incorporate a design to support AI workloads at an industry-leading scale, according to Crusoe.
The design will be optimized for direct-to-chip liquid cooling and also accommodate air cooling. Once completed, the data center will be able to operate up to 100,000 GPUs on a single integrated network fabric. The site is expected to be powered by on- and off-site renewable resources, including surrounding wind developments and a possible large-scale on-site solar installation.
A Fortune 100 hyperscale tenant has agreed to a long-term lease for the entire facility, with occupancy set to begin in the second half of 2025. Chase Lochmiller, CEO & co-founder of Crusoe, said in prepared remarks they designed the data center to enable the largest cluster of GPUs and meet the rapidly expanding demand for purpose-built facilities for a market that will increasingly be powered by AI.
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This is the first phase of Crusoe’s development which will eventually expand to 1.2 GW capacity at the Lancium campus. The data center is expected to contribute nearly $1 billion to the local economy over the next 20 years, creating almost 100 local jobs.
Lancium broke ground on the Abilene campus in late 2022 and is projected to spend approximately $2.4 billion in real property improvements at the site, according to Data Center Dynamics. The 1,100-acre property currently has 200 MW of data center capacity, with 1,000 MW to be energized by 2025.
New focus for Blue Owl
The Abilene project is not the only recent digital infrastructure investment by Blue Owl, an alternative asset manager with more than $192 billion in assets under management.
In September, the firm formed a $5 billion joint venture with Chirisa Technology Parks and PowerHouse Data Centers to develop large-scale AI/HPC data centers for CoreWeave Inc. across the U.S. on a build-to-suit basis. The partnership expects to deploy up to $5 billion of capital.
And, last week, the New York-based firm agreed to acquire data center investment firm IPI Partners, the parent of data center companies Stack Infrastructure and Radius DC, for $1 billion. The IPI platform is one of the largest private U.S.-based data center investors with a portfolio of 82 data centers comprising more than 2.2 GWs of capacity across the globe.
Blue Owl said the acquisition will add about $10.5 billion in assets under management and further augment its digital infrastructure strategy. The deal is expected to close later this year or in the first quarter of 2025.
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