Crusoe announced two major energy storage deals today to sidestep grid constraints for its data centers. The AI infrastructure company said it would buy 12 gigawatt-hours of storage from 100-hour iron-air battery maker Form Energy, and expand its existing second-life battery deployment with Redwood Materials, which is already powering modular Spark data centers in Nevada.
Both of these novel deals will support Crusoe’s “bring your own power” approach to its U.S. data center pipeline, which spans more than 45 GW, co-founder and chief strategy officer Cully Cavness said onstage at the industry conference CERAWeek in Houston. The developer has been at the center of conversations around how to regulate large loads seeking to co-locate with generation.
“We take a view of trying to bring computing to where the energy is available or abundant and in many cases, building our own power generation,” Cavness said. At the time Crusoe launched its project in Abilene, Texas, for example, power from the grid was readily available — and in fact low demand even meant that wind was being curtailed in the region, causing moments of negative pricing.
“But that’s changed a lot in the last few years,” Cavness added. “Today, these kinds of opportunities are fewer and farther between, and we see more and more situations where we actually have to bring more or all of the power to the campus.”
Form, for its part, is increasingly focused on the data center market, and recently inked a deal to help power a Google data center in Minnesota with its biggest-ever battery project. Form’s batteries will help ensure capacity for Crusoe’s data centers during peak grid constraint moments throughout the year, Cavness said: “Solutions like these batteries can solve those crunch moments to enable more power to be available for the rest of the year.”
Redwood Materials has similarly focused on data center demand. Last summer, the battery recycling company unveiled a brand-new storage offering, dubbed Redwood Energy, to repurpose EV battery packs. At the time, Redwood and Crusoe launched a one-megawatt proof-of-concept powering Crusoe’s modular data centers on Redwood’s campus in Nevada, using solar and repurposed batteries. That system delivered more than 99% operational availability, the pair said today.
And now they’re expanding the deployment, to include 20 additional modular data centers, nearly seven times the original compute capacity. It’s a model that Redwood says is cheaper than anything else currently on the market to power data centers, has lower emissions, and is significantly faster to deploy. In the months since the company’s energy storage pivot, both Nvidia and Google have invested in the company’s Series E round.
These CERAWeek deals come at a time when Crusoe itself is all-in on gas: Gas turbines are the quickest way to power hyperscale data centers for now because there’s a “mature supply chain of turbines and the fuel itself,” Cavness explained onstage. Two years ago, Crusoe lined up 5 GW of gas turbines, putting it out in front of the current bottleneck.
But while gas is the company’s near-term expansion solution, “emissions and permitting is a huge issue,” Cavness added. In the longer-term, Crusoe is looking to decrease the emissions of its data centers, despite the Trump administration’s walkback of emissions regulations and environmental restrictions on permitting.
“While carbon emissions have been dialed down in the rhetoric recently… I don’t think this issue is gone as political cycles change,” Cavness said. “We do expect and anticipate that, as the climate issue persists, it is a very real issue, and we intend to be making contributions towards sustainable and low carbon power.”
That’s where batteries can play an important role, he added: “We take a multi technology approach, and we’re working with innovations and technologies across the board to be positioned to grow in a couple of different directions. There is better gas, geothermal, renewables and storage, nuclear and even orbital computing.”
Building batteries for data centers
Both Form and Redwood have been ramping up their manufacturing capabilities in the last year to meet the demands of data centers.
Redwood says it receives around 20 GWh of battery material annually. The company, founded by Tesla co-founder JB Straubel, has spent the last several years focused on supplying battery materials back into the EV manufacturing supply chain. It’s a closed-loop model that has allowed the company to capture value at both ends of the battery supply chain: by both charging companies to recycle their batteries, and selling battery materials back to manufacturers. Expanding that supply chain is a key focus for the company this year, Straubel said at CERAWeek.
In 2023, Redwood received a conditional commitment for a $2 billion loan from the Department of Energy’s Loan Programs Office to help fund the buildout of a gigafactory-scale battery materials campus in Nevada. Redwood backed away from that loan in late 2024, opting to instead fund the project with private financing, citing growing financial strength after the company raised $2 billion and generated around $200 million in revenue.
Form, meanwhile, is focusing the rest of 2026 on optimizing manufacturing and executing its first wave of large projects. (Its projects for Crusoe are expected to come online in 2027, as part of a later wave.) The company will begin scaling production of its second-generation battery, designed for more automated, higher-throughput manufacturing, lower costs, and increased reliability.
Form will also “generate the first meaningful revenues this year,” CEO Mateo Jaramillo told Latitude Media earlier this year. The deals come as all three companies are rumored to be headed toward an initial public offering. According to reporting by Axios, Crusoe itself is raising a pre-IPO round this spring at a valuation of $10 billion.
