The Sam Altman-backed energy startup Exowatt is getting into data center development via a new line of business that will deliver powered land and energy infrastructure to hyperscalers.
It’s a substantial strategic shift for the company, which launched in 2024 with a plan to sell a modular system combining concentrated solar thermal, a heat engine, and a thermal battery. Exowatt pitched its tech, dubbed the “P3,” as a cheaper, more scalable type of baseload power for data centers, ready to be deployed immediately.
The P3’s launch was a splashy event, complete with a red carpet and attended by investor Leonardo DiCaprio. At the time, the company said it had a pipeline of orders amounting to at least 1.2 gigawatts. In the year and a half since, the startup has raised $120 million dollars of debt and equity, but hasn’t disclosed any specific projects or customers.
Now, Exowatt’s new business arm, dubbed ExoRise, will develop behind-the-meter and off-grid deployments across the U.S. Southwest, effectively turning the tech startup into a full-scale infrastructure platform. This comes as hyperscalers increasingly prioritize speed to power, and eye the option of colocated, potentially behind-the-meter power. Exowatt said in a statement that it already has a more than 90-gigawatt-hour backlog of “signed customer demand” and plans to bring its first pilot online by the end of the year.
It’s not clear how central Exowatt’s original tech is to the ExoRise model. In September 2024, when the P3 was first unveiled, analysts told Latitude that there was “almost no way” the modules could support a data center’s reliability needs on a standalone basis.
In its announcement today, Exowatt said “integration” of the modules into every project would distinguish the company’s approach to development from competitors like Cloverleaf Infrastructure. “By controlling both the energy system and the development process, Exowatt enables faster delivery and more predictable outcomes than traditional powered land strategies,” the company said.
Exowatt’s time to shine?
When Exowatt launched in 2024, the generative AI boom was already well underway. But it wasn’t yet entirely clear the lengths to which hyperscalers would go — and how much they would spend — to get chips online.
In 2025, speed to power became the primary indicator of a company’s AI prowess: Elon Musk’s xAI made a splash by running at least 20 methane-fired turbines to get new computing power online faster at its Colossus data center. The White House released a plan to streamline permitting for data centers, and the Department of Energy directed the Federal Regulatory Commission to fast track data center interconnection. In the days before Christmas, Google acquired energy and data center developer Intersect Power, an unusual move that signals the hyperscaler desire for operational flexibility.
At the same time, it’s getting harder to sell power-equipped land to the data center developers that need it. David Steinbach, chief investment officer at Hines, told Semafor this week that real estate investors are finding utilities reluctant to arrange grid connection deals with middlemen like real estate firms.
Nonetheless, there is a growing group of energy-focused developers hoping to meet the hyperscaler market. Cloverleaf Infrastructure, a startup that launched just a few months before Exowatt unveiled the P3 in 2024, has raised $300 million and is currently developing land for one of the OpenAI/Oracle Stargate data center clusters in Wisconsin. Cloverleaf acquired and permitted the land, inked an agreement for up to 3.5 GW of power by 2030, and expects to complete the campus sometime in 2028.
Like Exowatt’s new offering, Cloverleaf is focused on getting data centers online faster by shouldering the energization. Unlike Exowatt, however, Cloverleaf’s model is fundamentally grid-tied, and the company works closely with utilities in addition to hyperscaler customers. The company leverages a range of technologies, including grid enhancing technologies, renewables, and battery storage, among other things.
Key to Cloverleaf’s success in securing both investors and customers so far has been the team’s development expertise and existing relationships in the sector. Cloverleaf’s founders include former executives from Pattern Energy and Microsoft.
This is an example that Exowatt, for its part, seems to be following. While neither of the company’s founders has prior data center or hyperscaler experience, having OpenAI CEO Sam Altman as an investor has certainly raised Exowatt’s profile. (Altman was an angel investor in Exowat’s April 2024 seed round.)
Now, the company has hired Nic Bustamante, an alum of infrastructure and data center teams at Microsoft, Google, and Apple, and most recently Corscale, a data center developer focused on modular designs and on-site power for hyperscale facilities. Bustamante, Exowatt said in its announcement today announcing both ExoRise and the hire, will lead partnerships with hyperscalers and infrastructure financiers.
Tech challenges
Much of the skepticism regarding Exowatt’s launch came down to the technologies the company planned to use, and its claims regarding cost and speed.
The P3 module combines a proprietary battery cell, charged by the sun using concentrating solar lenses. Packs of those cells are connected to a Stirling engine, which converts energy from the batteries into electricity. The problem many experts see is that P3 is essentially a repackaging of technologies that have been largely unsuccessful in prior iterations.
Several solar companies leveraging Stirling engines, for example, went bankrupt in the early 2010s, in part because that particular heat engine was complex and expensive. And at its core, the P3 is a modular solar-thermal system, the use of which for power generation has been mostly abandoned, thanks to high price points — and the extensive land requirements.
In a calculator on Exowatt’s website that has since been removed, the company said that serving a 50-MW peak for 24 hours in a sunny location would require up to 1,123 acres, or more than the entirety of Central Park. The cost of such a setup, as estimated in late 2024, would be around $420 million, with at least $1 million in annual operations and maintenance.
It remains to be seen to what extent the P3 — which CEO Hannan Happi once touted as “an engineering masterpiece” that would change the game for powering data centers — will remain at the center of the company’s business model. Exowatt declined to speak with Latitude about the announcement, and didn’t respond to emailed questions about its anticipated technology mix, or how much of its overall business will focus on development versus the original business model — direct sales of the P3.
