Crusoe Energy deploys power electronics solutions to enhance grid reliability as data centers scale to multi-gigawatt loads.
Crusoe, an AI infrastructure company and lead developer of the Stargate campus in Abilene, Texas, has announced a partnership with ON.energy, which builds power-systems technology for large loads. Beginning this year, Crusoe will deploy five gigawatts of ON.energy's uninterruptible power systems (UPS) across its campuses nationwide.
This partnership represents the latest in a series of strategic supply-chain deals through which Crusoe has been securing technologies for its nearly 5-gigawatt pipeline of data centers—a critical effort as shortages of transformers, gas turbines, and other equipment threaten to delay AI infrastructure expansion. Last March, the company announced major agreements with Form Energy and Redwood Materials for battery deployments.
ON.energy's UPS is a medium-voltage electrical system composed of a backup battery, two power conversion systems, and a transformer, specifically engineered for AI data centers. It sits between a data center and its power source, effectively decoupling the two. The system acts as a shock absorber against both internal GPU load swings that would otherwise destabilize the grid, and external voltage faults that risk damaging sensitive hardware.
The UPS serves as a critical buffer for grid-connected AI data centers, which have emerged as a significant threat to grid reliability not merely because of their power consumption, but because of their operational behavior once connected. AI training requires data centers to ramp power up and down in synchronized bursts, creating dramatic fluctuations in demand. Without mitigation systems like the UPS, these fluctuations propagate back into the transmission system, straining the grid.
Voltage faults or other disturbances can cause data centers to suddenly disconnect entirely. This creates large load-loss events in which utilities abruptly lose gigawatts of demand, creating demand-supply imbalances that can damage grid and generation assets. In February 2025, a high-voltage power line malfunction in Virginia caused 40 data centers consuming roughly 2 gigawatts to simultaneously switch to backup power, forcing grid operators into damage-control measures. This marked the second such incident within months.
The North American Electric Reliability Corporation subsequently analyzed numerous load-loss events across the East Coast and Texas. Its investigation found that "customer-initiated large load reductions" occurred in seconds, leaving utilities little or no time for real-time response. NERC issued a rare Level 3 alert in May regarding data center risks to grid reliability and called for major regulatory shifts to address blind spots among utilities, grid operators, and data center operators.
The Crusoe-ON.energy partnership has potential to mitigate precisely these risks for Crusoe's data center customers and their serving grids. While Crusoe's AI infrastructure strategy relies significantly on behind-the-meter power systems, most of its data centers will maintain grid connections as well.
Capabilities like those provided by AI UPS systems are increasingly becoming prerequisites for grid interconnection. ON.energy's AI UPS meets ERCOT's latest large load interconnection requirements, which mandate that loads of 75 megawatts or more must ride through disturbances, remaining connected or restoring at least 90 percent of power draw within seconds.
"This technology protects our infrastructure, it protects our generation assets, and it aligns with where grid requirements are heading," Chris Dolan, Crusoe's chief data center officer, said in the announcement.