Some AI cloud providers, the so-called neoclouds, are moving past renting and building data centres into making the electrical gear inside them. Crusoe has owned an electrical equipment maker since 2022, and Fluidstack was reported in September to be in talks for a Pentagon loan of about $5 billion to expand manufacturing of data-centre components.
The payoff is time. SemiAnalysis says Crusoe took low-voltage switchgear from vendor quotes of up to 100 weeks to about 22 weeks by making it in-house. By our arithmetic, that saves up to 78 weeks, about a year and a half, on one piece of gear a site needs before it can switch on.
Business Pill · Vertical Integration Explained
An evergreen Business Engineer explainer on vertical integration. It teaches the general idea only and does not discuss Crusoe, Fluidstack or data-centre equipment.
The key insight: Crusoe has owned an electrical equipment maker since its June 2022 deal for Easter-Owens, and SemiAnalysis says making low-voltage switchgear in-house took Crusoe from vendor quotes of up to 100 weeks to about 22, a saving of up to 78 weeks by our arithmetic.
Jessie Dong set out the thesis on X on Monday in a post at 15:33 UTC: “the most vertical compute companies are going beyond owning the data center building. the next step is to build factories!” Dong named Fluidstack and Crusoe as the two examples, and pointed to Nvidia’s Rubin Ultra racks at 600 kW. That framing is the poster’s view; the facts below come from the companies and our earlier reporting.
Reported lead times for data-centre power equipment, in weeks. New US gas turbine: six-year average, a Wood Mackenzie analyst told Reuters (9 Nov 2026). Low-voltage switchgear: vendor quotes of up to 100 weeks and about 22 weeks in-house at Crusoe, per SemiAnalysis on X (2 Nov 2026). Figures not independently verified; 312 weeks and the up-to-78-week saving are our arithmetic.
Crusoe: From Customer to Owner
Crusoe announced on 22 June 2022 that it had acquired Denver-based Easter-Owens Electric Co., which its release called “the manufacturer of modular data centers and specialized electrical systems”. Easter-Owens was founded in 1955 and had been a major supplier to Crusoe since 2020, the release said.
At the time Crusoe ran modular data centres powered by gas that would otherwise be flared. The release said the deal extended its strategy of vertically integrating power, modular infrastructure and digital technology. Co-founder Cully Cavness said: “we see many strategic opportunities through the integration of Easter-Owens’ design and manufacturing capabilities.”
Four years on, the manufacturing arm, now called Crusoe Industries, makes switchgear for AI sites. As we reported in OpenAI’s Abilene Builder Crusoe Cuts Power-Gear Wait by 40%, Cavness said making medium-voltage switchgear in-house cut Crusoe’s lead time by 40%. Crusoe’s September release put its manufacturing footprint at roughly 1 million square feet after a second Tulsa plant opened.
Fluidstack: A Loan Still in Talks
The Wall Street Journal reported on 10 September that the Pentagon was in talks to lend roughly $5 billion to Fluidstack through the Office of Strategic Capital. As we covered in FluidStack & the $5B Pentagon AI Infrastructure Loan, the reported purpose was manufacturing capacity for data-centre components such as transformers and switchgear, not a new data centre.
Reuters said it could not immediately verify the report. Neither the Department of Defense nor Fluidstack responded to comment requests at the time, and nothing was signed. We found no announcement of a signed loan since.
Why Rack Power Raises the Stakes
Nvidia chief executive Jensen Huang said at GTC 2025 that one Rubin Ultra NVL576 rack, the Kyber rack planned for the second half of 2027, will draw about 600 kW, as DatacenterDynamics reported. As we covered in Nvidia’s 600 kW Rack Equals 75 of Today’s Average Racks, that is the power of 75 average racks of 8 kW, by our arithmetic.
Nvidia’s own technical blog says it is leading a move to 800 VDC power “to support 1 MW IT racks and beyond, starting in 2027”. It says full-scale production of 800 VDC data centres will coincide with Kyber rack-scale systems in 2027. More power per rack means more and different electrical gear between the grid and the chips.
The Waiting Line
The gear is the queue. New gas turbines now take six years on average to reach US buyers, a Wood Mackenzie analyst told Reuters, as we reported in Used Turbines Cost Up to 48% Less as New Ones Take 6 Years. SemiAnalysis puts the gear that energises a hall on a 12-to-18-month queue, as we reported.
Against those waits, owning a factory turns a supplier’s queue into an internal schedule. Crusoe’s September release claimed that because parts are built in-house, Crusoe “can turn around in days what often takes the rest of the industry months.”
The Structural Read
As we read it, the neocloud business is rent on energised halls, so every week cut from the equipment queue is a week earlier that capacity can be billed. That is why owning the factory, not only the building, enters the strategy.
Crusoe release, 22 June 2022
“we see many strategic opportunities through the integration of Easter-Owens’ design and manufacturing capabilities.”
Three Implications
FOR NEOCLOUD RIVALS Crusoe’s September release claims it can turn around in days what often takes the rest of the industry months, because parts are built in-house.
FOR FLUIDSTACK The reported Pentagon loan of about $5 billion would fund component manufacturing, but it was reported only as talks, unconfirmed by either side.
FOR RACK POWER Nvidia’s blog says it is moving to 800 VDC to support 1 MW IT racks starting in 2027, beyond the 600 kW Huang cited for Kyber.
The framework says: “The structural bottleneck isn’t computing, it’s electrons.”
As we read it, the gear that carries those electrons into a hall, switchgear and transformers, is part of that bottleneck, and making it in-house is one way to shorten the wait. The framework does not discuss Crusoe or Fluidstack.
What Is Not Established
The Fluidstack loan rests on one reported negotiation that neither party confirmed. The switchgear lead times come from SemiAnalysis and Crusoe, not from independent audits. The 600 kW figure is Huang’s, as reported, for a rack Nvidia plans for 2027; Nvidia’s own blog speaks of 1 MW racks from 2027. Neither company has disclosed what its factories cost or earn.
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Crusoe has owned an electrical equipment maker since its June 2022 deal for Easter-Owens, and Fluidstack’s reported Pentagon loan would fund component manufacturing. On SemiAnalysis’s figures, Crusoe’s in-house switchgear saves up to 78 weeks against vendor quotes, by our arithmetic.
A note on sourcing. The Easter-Owens deal comes from Crusoe’s June 2022 release, which we read as republished. Rack power comes from Nvidia’s technical blog and from Huang’s GTC 2025 remarks as DatacenterDynamics reported them. The Fluidstack loan, switchgear lead times and turbine waits come from our earlier pieces and the reports they cite. The 78-week and 312-week figures are our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
