Crusoe-backed Heron Power picks Morgan Hill, California, for first large-scale transformer factory

Heron Power, a US transformer developer backed by Crusoe, has selected Morgan Hill, California, as the site of its first large-scale manufacturing facility, targeting surging demand from the data center industry. The company will convert a former 286,000 sq ft (26,570 sqm) distribution warehouse just south of San Jose into a production plant for its 5MW Heron Link medium-voltage power conversion system, designed for data center and large-scale energy applications.

Once fully operational, the factory is expected to produce up to 10,000 Heron Links annually, representing roughly 40GW of capacity per year. Site preparation is set to begin immediately, with mass production slated to start in late 2027. The move comes as utilities and developers across the US grapple with record electricity demand driven by AI infrastructure, electric vehicles, and the rapid build-out of renewable generation.

"America's grid has to grow faster than it has in decades. We're seeing new demand from AI and EVs, and at the same time new supply from solar and storage," said Drew Baglino, CEO and founder of Heron Power. "The equipment running the grid hasn't changed in fifty years. Heron Factory One in Morgan Hill is how we fix that. We're manufacturing the leapfrog technology our grid needs, at scale, in America first."

The factory announcement follows the close of Heron's Series B funding round earlier this year, which raised $140 million and brought the company's total funding to $183 million. Heron closed its Series A round in May 2025. The company says its Heron Link system is a modular megawatt-scale power converter built on the latest advances in wide-bandgap semiconductors, engineered for high power density and ease of maintenance, offering improved reliability and lower costs for renewable energy storage and data center developers.

Heron has already begun forging commercial ties with data center operators. In June 2025, the company signed a Letter of Intent with Crusoe to supply power converter technology for the Stargate data center campus in Texas. Founded in 2024 by former Tesla senior executive Drew Baglino, Heron Power is headquartered in Scotts Valley, California. The Morgan Hill plant marks a significant step in the company's strategy to scale domestic manufacturing of next-generation grid equipment, a segment that has drawn growing attention as hyperscale data center projects strain existing power infrastructure across the US.