AI data center startup Crusoe has publicly announced a "pause" on its Wyoming data center plan, but the reality is the company is being pressured to exit, having failed to secure clients including Alphabet (GOOGL). Meanwhile, the project itself will continue to advance under a new cooperative framework.

According to a Bloomberg report citing informed sources, Alphabet expressed concerns regarding the project's costs and timeline under Crusoe's leadership, which directly led to the pressure for Crusoe's withdrawal.

Utility company Black Hills (BKH) stated on Wednesday that it will proceed with the data center development without Crusoe's involvement.

With Crusoe out of the picture, Alphabet is finalizing an agreement with the remaining partners to purchase computing power from the project, with negotiations entering their concluding stages.

Bloom Energy Corp (BE), which has supply chain links to the project, saw its shares rise over 6% on Thursday, closing at $248.88.

Negotiations Continue Despite Crusoe's Marginalization

Crusoe had previously announced a "pause" on the Wyoming data center plan, but sources indicate the company is actually under pressure to exit. The planned power consumption for this data center is sufficient to supply a city the size of Denver.

However, according to a person familiar with Crusoe's business, a complete exit for Crusoe is not yet a finalized outcome.

It is more likely that another company will acquire Crusoe's stake in the project. Crusoe is still negotiating to retain some form of participation, with its most recent engagement with a potential client occurring this past Monday. This source stated that Crusoe submitted a budget proposal within the acceptable range for the potential client.

A Crusoe spokesperson said the company has not signed a formal agreement with a potential client for the Wyoming project but is in exclusive negotiations. The developer has completed some preliminary site work and obtained local approvals. The related rights are held by a Crusoe subsidiary, which has currently halted on-site operations.

Project Remains on Track for Early 2028 Launch

Despite the change in partners, the progress of the Wyoming data center project has not been interrupted. Black Hills explicitly stated in a Wednesday announcement that the project is "not paused," and the company is working directly with potential clients to advance it, with the data center expected to be operational in early 2028.

The project was initially announced by Crusoe in July 2025 in partnership with Tallgrass, an infrastructure company under Blackstone. Crusoe CEO Chase Lochmiller stated at the time that the campus could ultimately scale to 10 gigawatts.

Before Alphabet engaged with Crusoe on the Wyoming project, Crusoe had first approached Oracle to gauge its interest. However, according to sources, a deal did not materialize as Oracle expressed skepticism about the project's power supply solution and indicated it was unwilling to partner with Crusoe on data centers beyond the initial Stargate site.