Google has sidelined Crusoe Energy from the planned 1.8-gigawatt Project Jade data center campus in Wyoming and is now negotiating directly with remaining partner Tallgrass Energy, people familiar with the matter said.
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Google sidelines Crusoe from $7B Wyoming AI data center project
Google has sidelined Crusoe Energy from Project Jade, a planned 1.8-gigawatt AI data center campus in Wyoming that could scale to 10 gigawatts, and is now negotiating directly with remaining partner Tallgrass Energy about using the facility, according to people familiar with the matter. The move gives Google more direct control over one of the largest single AI data center campuses proposed in the US.
"At the request of our customer, Crusoe has paused its development activities," the company said in a statement published by Bloomberg, without naming Google. Crusoe demobilized and moved off the site several months ago, a Tallgrass spokesperson confirmed to the Wyoming Tribune Eagle. Cheyenne Mayor Patrick Collins said Tallgrass has been working with other AI infrastructure companies to replace Crusoe, though no replacement has been announced.
The $7 billion Tallgrass energy hub will supply 2.7 GW of natural gas-fired power with carbon capture via its existing CO2 sequestration hub, which can store up to 10.6 million metric tons of CO2 annually. Under the federal 45Q tax credit, power plants receive $85 per metric ton of CO2 stored. The first phase alone is expected to double Wyoming's current electricity generation. The data center campus, spanning 600 acres in Laramie County, was approved for five buildings totaling about 4 million square feet, with construction slated to begin in the first quarter of 2026 and the first building operational by the end of 2027.
The shakeup reflects the intense competition among AI infrastructure providers to secure hyperscaler partnerships as demand for AI compute capacity surges. Crusoe, which has built data centers for OpenAI and Microsoft, now faces a gap in its project pipeline, while Tallgrass continues seeking a replacement developer. Laramie County Commission Chairman Gunnar Malm said a new developer may not need to resubmit site plans if it does not materially alter the existing design.
Tallgrass Pushes Forward With Carbon Capture Strategy
Tallgrass confirmed its work on Project Jade remains "full steam ahead" and that the tenant of the data center — still unnamed — has not changed. The company has been in discussions with other AI infrastructure companies to replace Crusoe, Collins said.
The project's power strategy — natural gas turbines paired with carbon capture — has drawn scrutiny as communities push back against gas-powered data centers. A group of Mississippi residents recently sued Elon Musk's xAI over noise from gas turbines powering its Colossus data centers near Memphis, describing the sound as like a "jet engine." The NAACP has also sued over alleged unpermitted air pollution from xAI's Southaven facility. Tallgrass's approach differs by integrating carbon sequestration from the outset, though the long-term viability of underground CO2 storage at the planned scale of 318 million metric tons over 30 years remains unproven at this volume.
Community Investment and Housing
Beyond the data center, Tallgrass has invested in local infrastructure. After Wyoming's State Loan and Investment Board denied a $2.175 million grant for affordable housing in Cheyenne, Tallgrass contributed $2.9 million to keep the First & Union housing project alive. The development would provide 444 units for families earning 60 percent of the area's median income. The construction phase is expected to employ about 5,000 workers at its peak, with 400 permanent jobs once operational.
What It Means for Investors
For Google, directly negotiating with Tallgrass gives it more control over one of the largest planned AI data center campuses in the US at a time when hyperscalers are racing to secure power capacity. The project's carbon capture component aligns with Google's stated goal of operating on 24/7 carbon-free energy by 2030. For Crusoe, the loss of Project Jade removes a marquee development from its pipeline, potentially weakening its competitive position against data center developers like Equinix and Digital Realty that are also expanding AI capacity. The broader trend of hyperscalers taking a more hands-on role in data center development could compress margins for third-party developers while accelerating buildout timelines.
This article is for informational purposes only and does not constitute investment advice.
