Since launching the AI-Energy Nexus newsletter we’ve spent much of our time and words focusing on the challenge AI data centers pose to utilities, grid operators, and data center developers: securing clean firm power at the right scale, speed, and location to meet the goals of AI companies.
This week’s announcements predictably followed suit. NRG acquired a gas generation fleet from LS Power, as well as the demand response and VPP company CPower, a clear move towards powering data centers paired with flexibility. Google followed by formalizing a deal with Elementl Power to develop three nuclear projects of at least 600 megawatts each.
This is the stuff of a demand-driven infrastructure boom. And the most talked-about startups are those with the potential to meet the moment with scale: Oklo with nuclear power, Fervo with geothermal, Form Energy with long-duration energy storage. Even the likes of OpenAI and Anthropic, with their superintelligence ambitions, are part of that group.
The AI-energy nexus, however, has many facets. Since it combines digital and energy infrastructure, the opportunities for innovation are both broad and niche.
Recently, our friends at Net Zero Insights released an excellent look at the space they call sustainable data centers. Their analysis categorizes startups by their function at the data center: renewable energy integration, thermal energy storage, rack and server hardware efficiency, infrastructure resiliency, cooling efficiency, waste management, and data center digitization. Among these, Net Zero finds that rack and server hardware efficiency, renewable energy integration, and infrastructure resiliency are attracting the most investment, while pre-seed stage companies are increasing in number and their share of total capital raised each year.
Gigawatt-scale opportunities naturally lead to massive investments, including $600 million for Crusoe, $500 million for Lancium from Blackstone for Lancium, and $258 million for Mainspring Energy’s fuel-agnostic linear generator. But there is important activity across the sector that indicates that the whole ecosystem is attractive to investors.
Consider the following:
- Zendo Energy is a software company specializing in an integrated software platform that they call an “Energy OS,” which manages energy operations in data centers. Based in London, Zendo has raised $2.3 million to date from Octopus Ventures, Fly Ventures, and Pact.
- Nodal Power Systems is a developer and operator of landfill gas-to-energy power plants, designed to serve data centers. Its focus so far has been on Bitcoin miners, but the solution is applicable to all data centers. Nodal Power raised a $13 million seed round in 2023.
- CleanArc Data Centers is a developer of hyperscale data centers, based in Las Vegas, NV. Backed by the private equity firm Snowhawk, Townsend Group, and a strategic investment from Nuveen (the investment manager of the TIAA pension fund), CleanArc pairs renewable energy procurement and power structuring with data center campus development. It’s currently developing a 600-MW campus in Virginia, planned for service in 2027.
- HyperLight specializes in designing and producing integrated optical circuits. Not often associated with climate tech investments, these photonic integrated circuits offer important levels of energy efficiency in a hyperscale data center. Data center developers are increasingly employing photonic solutions such as chips and interconnects, as they provide a path to massive scale without the associated energy and heat that comes with traditional solutions. HyperLight has raised $39.5 million to date across two rounds, with Foothill Ventures, Summit Partners, and Xora Innovation participating.
- Uppermost develops off-grid, solar microgrid infrastructure solutions for industrial and commercial applications. It recently raised a $2.5 million seed round.
- Submer, a Spanish startup that has raised $129 million over 9 rounds of equity and debt, specializes in immersion cooling technology for data centers and high-performance computing (HPC).
- Evroc, a Swedish data center firm, recently raised a $55 million Series A round, led by Blisce and Giant Ventures, with plans to launch 10 data centers across Europe by 2030. Evroc designs data centers with exclusively renewable energy sources, efficient IT infrastructure, “natural” cooling from location-based siting, and AI-based load balancing across data centers.
There are dozens more in each category, and many are global. Europe and the Middle East and Asia have their own supercycles of load growth beginning. And while their startup ecosystems aren’t as mature as in the U.S., new companies are emerging quickly especially in France, the UK, Israel, Canada, and China.
Net Zero Insights found that from 2020 to 2024, private capital for sustainable data center solutions in North America expanded at a compound annual growth rate of 47%. In Europe it grew at a CAGR of 40% during the same period, though with a mix of private and public funding.
A version of this story was published in the AI-Energy Nexus newsletter on May 14. Subscribe to get pieces like this — plus expert analysis, original reporting, and curated resources — in your inbox every Wednesday.
