Crusoe Pushed Aside at Wyoming AI Project After Google Concerns

Data center upstart Crusoe is being pushed aside at an artificial intelligence campus it was developing in Wyoming after failing to lock in customers including Alphabet Inc.’s Google, according to people familiar with the situation.

The developer known for giant AI buildouts announced that it had “paused” its plan to build a data center that would draw enough electricity to power a city the size of Denver. In reality, Crusoe is being pressured to leave the project, after Google had raised concerns about the costs and timetable under Crusoe’s watch, some of the people said, asking not to be identified because the information isn’t public.

The unraveling of Crusoe’s Wyoming plans threatens to raise concerns about the company’s ability to fulfill its promises to tech companies that are desperate for more computing resources to power their AI ambitions. The energy utility Black Hills Corp., which had been working to line up agreements to power the Wyoming data center, said Wednesday that it’s moving forward without Crusoe as the development partner.

With Crusoe on the sidelines, Google is working to finalize a deal with the remaining partners to buy computing from the site, two people said.

A Google spokesperson declined to comment. Black Hills didn’t respond to multiple requests for comment. A Crusoe spokesperson said the company didn’t have a signed agreement with a potential customer for the Wyoming project, but had entered into exclusive talks. The developer had done some work to begin preparing the site and had secured local approvals, which are owned by a Crusoe subsidiary, the spokesperson said, adding that it has since stopped work at the site.

While it’s more likely that other companies will buy out Crusoe’s interest in the project, Crusoe is still in talks to remain involved and was in touch with a prospective customer as recently as Monday, a person familiar with Crusoe’s business said, asking not to be identified publicly discussing the situation. The company presented a budget that fell within the range of the prospective customer, the person said.

The data center industry is running up against challenges from sourcing equipment to securing enough power, threatening the prospects of thousands new developers, some with limited experience , that have rushed into the AI infrastructure boom.

Read More: AI Gold Rush Drives Thousands of Newcomers Into Data Centers

Founded in 2018, Crusoe initially set out to use the excess natural gas from oil fields to power Bitcoin mining operations. It’s since shifted to developing the type of big data centers that power AI systems. Crusoe was tapped to help OpenAI and Oracle Corp. execute on a massive data center that would later be branded as Stargate and promoted alongside US President Donald Trump in 2025, putting the startup at the center of what was at the time the largest AI infrastructure project ever proposed.

The firm has attracted high-profile investors including Nvidia Corp., Salesforce Inc. and Mubadala Capital and was valued at $10 billion last year. Crusoe said Tuesday that it has contracts to provide nearly 5 gigawatts in capacity, not including the Wyoming project, spanning the flagship Stargate project with OpenAI and Oracle in Texas; a deal with Microsoft Corp. for an expansion of that site; and one near Amarillo, Texas, that local news outlets have reported would be used by Google.

Read More: Crusoe Touts 5 Gigawatts of Data Centers, Pauses Wyoming Site

For all the cash Crusoe has raised, the upstart is beginning to draw skepticism from some technology companies over its ability to get and keep massive and resource-intensive data centers online, the people familiar with situation said. Earlier this year, Crusoe suffered a different setback in Abilene, Texas. There, Oracle and OpenAI decided not to lease additional capacity from Crusoe.

Relations between Oracle and Crusoe had become strained by reliability issues at the Abilene site, Bloomberg previously reported. Earlier this year, data center buildings went offline for days due to winter weather affecting some of the liquid cooling machinery, people familiar with the incident said, asking not to be identified speaking publicly about it. Crusoe also had trouble running gas generators at the site, and VoltaGrid was brought in to help power the data centers, people familiar with the issues said.

Microsoft eventually scooped up the extra power at the Abilene site.

Read More: Oracle and OpenAI End Plans to Expand Flagship Data Center

Crusoe initially announced the Wyoming project in July 2025, alongside the Blackstone Inc.-backed infrastructure firm Tallgrass. At the time, Crusoe Chief Executive Officer Chase Lochmiller said the complex would eventually be capable of scaling to 10 gigawatts. The data center was designed to leverage Tallgrass’ natural gas and water pipelines in the area.

Blackstone declined to comment.

Before Google discussed partnering with Crusoe on the Wyoming data center, Crusoe gauged Oracle’s interest, people familiar with the situation said. A deal didn’t materialize, people said, and Oracle was skeptical of the site’s power plan and expressed a reluctance to work with Crusoe on data centers beyond its initial Stargate site.

Oracle said by email that “Crusoe remains a strong and reliable partner” and that it’s proud of the progress the firms have made together at the Abilene site. The company said it regularly assesses new sites with Crusoe and other partners to meet future demand.

Crusoe continued to tout its Wyoming plans to investors and prospective backers in August 2025 when it was seeking to raise funds at the $10 billion valuation, a person familiar with the situation said. The startup had already scored a deal with Google for the Goodnight data center campus near Amarillo, and the company told investors Google was considering a similar deal in Wyoming, the person said.

One idea discussed was to have a Google-backed neocloud provider lease capacity at the campus, one person said, an arrangement that would’ve helped the big tech firm avoid straining its balance sheet.

With or without Crusoe, the Wyoming data center is moving forward.

In the statement issued Wednesday, Black Hills said it was working directly with a potential customer on the Wyoming project now. The work has “not been paused,” the utility said, and the center is on track to be in service in early 2028.