Crusoe Energy Sells Bitcoin Mining Business to NYDIG for AI Expansion

Crusoe Energy, a company specializing in capturing waste gas from oil to power high-performance computing, has announced its decision to sell its Bitcoin mining business to New York Digital Investment Group (NYDIG). This strategic move is aimed at allowing Crusoe to concentrate on the expansion of its artificial intelligence (AI) infrastructure. The deal, which is subject to regulatory approvals and other consents, includes Crusoe’s 270 megawatts of power generation technology from over 425 modular data centers across the United States and Argentina. Additionally, 135 Crusoe employees will join NYDIG, ensuring that no roles are eliminated as a result of the transaction.

Crusoe, founded in 2018, has been at the forefront of technology that captures waste gas created during oil extraction and refinement, which is typically burned off in a process called gas flaring. This captured gas is then converted into electricity to power Bitcoin miners and AI data centers. The company’s Bitcoin mining operation has been significant, with some reports suggesting it accounts for 1% of the world’s Bitcoin mining. However, Crusoe’s focus has shifted towards AI, with the AI business now constituting the majority of its revenue. The company recently expanded its AI data center in Abilene, Texas, to 1.2 gigawatts and announced a joint venture with investment firm Engine No. 1 to develop large-scale data center campuses across the US to enhance AI capabilities. In December of last year, Crusoe closed a $600 million Series D round at a $2.8 billion valuation to power AI.

NYDIG, on the other hand, sees this acquisition as a means to expand its role in supporting Bitcoin’s proof-of-work security. Ross Stevens, the founder and executive chairman of NYDIG, emphasized the importance of securing the Bitcoin network at the lowest possible cost, especially in the context of global energy poverty. NYDIG’s affiliation with Stone Ridge Holdings Group, which owns and controls over 10GW of U.S. natural gas production, provides a complementary source of power for Bitcoin mining. This reduces energy input costs through the consumption of stranded energy available throughout the life cycle of a natural gas well. Crusoe’s Digital Flare Mitigation (DFM) technology, which captures natural gas that would otherwise be burned off or “flared” and converts it into electricity to power advanced, modular data centers, aligns perfectly with NYDIG’s goals. Crusoe’s Bitcoin mining operation, which includes more than 20 sites across 7 states and a joint venture in Argentina, will be operated and expanded by NYDIG.

Chase Lochmiller, CEO and co-founder of Crusoe, expressed pride in Crusoe’s pioneering role in repurposing wasted energy resources for the Bitcoin network. He noted that Crusoe’s innovative approach to energy utilization for mining is complementary to NYDIG’s Bitcoin custody, institutional trading, and mining businesses, creating a consolidated business that is more valuable than the sum of its parts. Following the deal, Crusoe will continue to channel its energy-first mentality towards scaling AI infrastructure and accelerating the adoption and proliferation of AI in everyday lives. Tejas Shah, CEO of NYDIG, praised the cultural alignment and mutual commitment to driving advancements at the intersection of power and compute that founded the partnership with Crusoe. He highlighted Crusoe’s remarkable innovation in bringing together the industry’s top talent to solve complex challenges and unlock untapped energy sources. The final closing of the transaction is subject to regulator approvals and customary consents. Following the deal, Crusoe will shift its focus toward scaling AI infrastructure, building AI-optimized data centers, and expanding its Crusoe Cloud product.