Texas curtailed nearly 10,000 gigawatt-hours of renewable energy last year, mostly due to transmission constraints. California, meanwhile, curtailed more than 3,700 GWh.
The fact that so much power goes to waste each year shocked Varun Palivela, an electrical engineer who has spent his career designing high-performance computer chips. At a time when data center developers are scrambling for electricity, it seemed like a missed opportunity.
“I’m used to thinking of energy as a scarce resource, and here we are throwing away so much of it,” said Palivela, who co-founded the startup Rune in late 2022 and is currently CTO, in an interview with Latitude Media. “The problem is that energy is stranded in time and space.”
While some of that power can be stored in batteries, the cofounders said ample amounts are also available to accommodate smaller data centers. So Rune, which last week announced a $40-million Series A led by Spark Capital, designed a modular data center attached to a power electronics block. The system plugs directly into utility-scale projects — without expensive substation upgrades, transformers that are in short supply, and yearslong interconnection queues.
Palivela explained that utility-scale solar and wind operates at 1,500 volts direct current — a lot higher than what servers and AI chips run on. To make power usable for low-voltage computing, grid-connected data centers rely on substations and step-down transformers.
Rune’s system, called RELIC (which stands for “renewable energy linked intelligent compute”), takes a different approach. The modular unit plugs directly into a solar or wind farm behind the inverter, before the power is ever exported to the grid. It contains a GPU server, liquid cooling, and custom power electronics.
A big part of Rune’s pitch is speed to power. RELIC can be shipped to a site and energized within six weeks, and doesn’t require any construction or grid work, the company says.
The startup has deployed units at a solar project in Texas, as well as some sites in California and Massachusetts for a combined total of one megawatt of capacity. But Palivela’s co-founder, Rune CEO William Layden, said the company has a pipeline in the hundreds of megawatts with “some of the biggest names in power.” He declined to disclose the names of those partners.
Clean energy for AI
Rune joins a crop of other companies testing how to power artificial intelligence with renewable energy at a time when many developers are turning to gas. The startup is targeting the AI inference market, or the day-to-day use of chatbots or other programs, which requires less energy than training large language models that are driving the demand for gigawatt-scale campuses.
“So far all our customers have been using 128 GPU clusters,” said Palivela, noting that this is ideal for fine-tuning AI models, inference, and research. “That’s what we’re selling right now, and pretty soon we’re going to upgrade the cluster size to 1,024 GPUs.”
Span and Sunrun are also running pilots in the inference market, although they are pairing mini at-home data centers with solar and storage. Meanwhile, TAR, which announced a $120 million Series A earlier this month, aims to build large off-grid data centers powered mainly by renewables.
Rune, for its part, has signed power purchase agreements with the owners of utility-scale solar projects — and soon wind farms. Layden said that while the company buys the power outright, it earns money from selling the compute to AI labs and other startups.
Layden spent several years at SB Energy, Softbank’s energy subsidiary that has recently pivoted from renewables to gas for data centers, as well as Cube Hydro, which used excess hydropower for bitcoin mining. He said Rune’s decision to target curtailed renewables will help the startup scale quicker.
“Everyone thinks you have to make a sacrifice when you use clean energy, but you don’t,” Layden said. “We want to build the future, not burn it.”
