Crusoe Energy, the company that powers AI and crypto workloads from waste gas burnt at oil wells, has borrowed $200 million to buy thousands of NVidia H100 GPUs.
Crusoe will be borrowing $200m from investment firm Upper90, to buy H100 TensorCore GPUs, the latest Nvidia GPU which launched in April. The company will also buy some more of the previous version, the A100.
Crusoe started out offering cryptomining but is switching to offer cloud AI services, along with graphics and scientific computing on its containerized high-performance micro data centers, which are located at oil wells and powered by gas that would otherwise be flared off and wasted.
The company says the new GPUs will come online in early 2024, “at a time when the entire compute infrastructure market is constrained due to burgeoning demand from AI/ML workloads, and Crusoe is excited to support this fast-growing market.”
The company is planning to have 20,000 of the H100s available for customers, says CEO Chase Lochmiller, reports the Information, which notes that the chips will be the collateral for the loan.
Digging a bit deeper, the Information says Crusoe has three and a half years to pay off the loan, and plans to generate revenue from the chips for seven years. It notes that CoreWeave, an AI cloud located in conventional data centers has also taken out debt to buy H100 GPUs, in a deal which appears the chips to work continuously and not depreciate in value for six years.
Whatever the details of the deals, the Information notes: “The fate of Crusoe and other GPU cloud providers is intertwined with Nvidia's. So long as Nvidia remains dominant, its chips will be valuable for longer. And that will give Crusoe, CoreWeave, and other cloud providers a shot at generating profits.”
Upper90 was part of previous funding rounds for Crusoe, including a $350 million Series C equity offering in 2022, led by climate technology venture capital firm G2 Venture Partners (G2VP).
G2VP said that Crusoe’s business fits its mandate to “scale technologies that economically decarbonize large existing industries."
Crusoe says that its use of otherwise wasted gas reduces flaring at oil wells, and burns gas more efficiently, reducing methane emissions, claiming that in 2022 these reductions were the equivalent of taking 170,000 gasoline-powered cars off the road.
However, this is also seen as “greenwashing” as it reduces incidental emissions in the production of oil and gas, which scientists all agree should be left in the ground.
Crusoe also makes a new and interesting claim, that “Crusoe Cloud’s new capacity is powered by 100 percent carbon-free energy."
DCD has asked the company for more on that.
“Upper90 is thrilled to expand our partnership with Crusoe which started in 2019 with equipment financing as they scale their innovative AI product offering that combines high-performance computing infrastructure with a positive environmental impact,” said Upper90 co-founder and CEO, Billy Libby. “As a firm that provides tailored debt solutions to technology companies with predictable revenue or collateral, Crusoe is a great example of businesses we're looking to back.”
