Investors embrace Cloverleaf’s energy-first approach to data centers

The premise behind Cloverleaf Infrastructure’s approach to data centers is that there’s a gap in the market.

Historically, the industry has been led by people with a background in fiber optics and cyber networks. But that is no longer the case. The rise of artificial intelligence has prompted such dramatic growth in power demand that today the biggest constraint for the tech companies looking to scale the technology is power. 

Enter Cloverleaf, a startup helmed by founders with backgrounds at developers like Pattern Energy and ConnectGen, as well as at Microsoft.

The company’s energy-first approach to siting and developing digital infrastructure seems to be catnip for investors. Cloverleaf announced last week that it has secured $300 million in capital commitments largely from NGP and Sandbrook Capital, both private equity investors rooted in the energy industry. The management team also made investments in the company.

This pot of non-dilutive infrastructure funding represents the first money that Cloverleaf has raised, and it comes amid a challenging fundraising environment. But both the size and nature of the raise speaks to the experience of its founders — and to the moment they’re choosing to launch.

In the last eighteen months, CCO Brian Janous told Latitude Media that there has been “this sort of collective awakening that the cloud and AI business is a power business; it’s a power conversion business.”

Raising amid a shift in priorities

In Janous’ years in the industry, he said land and power were always “the smallest piece of the capital stack,” roughly a couple of percent of the overall cost of a data center project.

Today, though, that has become “the most critical piece”: the lynchpin of developing AI and the data centers that power it.

“Our timing was quite fortunate in that the collective consciousness around the power challenges associated with AI really came to it a head while we were raising,” Janous said. “But it takes a long time to just change the focus of an industry.”

Cloverleaf is nonetheless moving at quite a clip. The team raised the $300 million in less than a year, having started courting investors in late-2023. They were able to keep their outreach small, given the strong early interest, especially from those who were already in the founders’ networks. 

In addition to Janous, who was previously the vice president of energy for Microsoft, the founding team includes CEO David Berry, who was previously the co-founder and CFO at developers ConnectGen and Clean Line Energy Partners; and CTO Jonathan Abebe, who has an engineering and technical background at the Department of Energy, Pattern Energy, and Clean Line Energy. 

According to Janous, the team did consider starting with a smaller venture round, but determined that they needed to “show up with pretty large checks” given the fact that their model requires acquiring land — and complex conversations with utilities that are made easier with access to a lot of capital. 

“We want to make sure that utilities understand that when we come to them and say, ‘Hey, we want you to help us develop a gigawatt-scale data center,’ that there's money behind that,” he added. “We're not asking them to go do a bunch of work with no promise that they're going to be kept whole through all those investments.”

The Cloverleaf model 

The premise behind the company is relatively simple: invest in land where renewable energy will be easy to access, and build data centers that can guarantee power to their customers, and quickly. Making that happen, though, is a little more complicated.

The key question is how to make sure that energy is clean power — or at least that it has a “line of sight” to clean power. On this front, Cloverleaf is clear on the fact that data center energy demand may need to be met by fossil-fueled power in the near-term, even for companies like Microsoft or Google that have ambitious sustainability goals. (Those companies are already seeing their emissions rise as a result of their investment in scaling AI, as recent reports have made clear.) 

“We’re having to grapple with the question of the need for speed and scale along with the need for sustainability,” Janous said. “How do you create the right supply in the short-run and ensure that supply is tied to a plan to as quickly as possible decarbonize that energy source?”