Peak XV Invests in Indian Startup C2i to Overcome AI Data Center Power Limits
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Power as a Limiting Factor in AI Data Centers
Recently, power has emerged as the critical limiting factor in the scalability of AI data centers, overshadowing traditional computational capabilities. This shift has led to significant investments in innovative solutions, such as those being developed by C2i Semiconductors, a promising Indian startup. Supported by Peak XV Partners, C2i focuses on creating plug-and-play, system-level power solutions aimed at reducing energy losses and enhancing the economics of large-scale AI infrastructures.
C2i’s Funding Success
C2i, which stands for Control Conversion and Intelligence, has successfully raised $15 million in a Series A funding round led by Peak XV Partners. This round also saw participation from Yali Deeptech and TDK Ventures, bringing the total funding to $19 million since its inception. This influx of capital comes at a time when global energy demands for data centers are soaring.
The Growing Demand for Energy in Data Centers
According to a report from BloombergNEF, electricity consumption by data centers is expected to almost triple by 2035. Additionally, Goldman Sachs Research forecasts a remarkable 175% surge in power demand among data centers by 2030, akin to adding another major power-consuming nation to the global landscape.
The issue lies not primarily in generating electricity but in the efficient conversion of this energy within data centers. For instance, high-voltage power typically needs to be stepped down thousands of times before it can effectively reach Graphics Processing Units (GPUs). Current methodologies waste between 15% to 20% of electrical energy during this process, as highlighted by Preetam Tadeparthy, C2i’s co-founder and CTO.
Innovative Solutions from C2i
Founded in 2024 by former Texas Instruments executives Ram Anant, Vikram Gakhar, Preetam Tadeparthy, Dattatreya Suryanarayana, along with Harsha S. B and Muthusubramanian N. V, C2i proposes a revolutionary approach to power delivery. They are redesigning power systems into a “grid-to-GPU” format, essentially creating an integrated platform that simplifies energy conversion and control.
By consolidating power conversion, control, and packaging, C2i anticipates a reduction in end-to-end energy losses by approximately 10%. This could translate to a savings of around 100 kilowatts for every megawatt consumed. Such improvements would not only impact energy costs but also cooling expenses, GPU utilization, and overall data center economics.
Financial Implications of Energy Efficiency
Rajan Anandan, managing director at Peak XV Partners, emphasizes the financial significance of reducing energy costs for data-center operators. After the initial capital investment in servers and facilities, ongoing energy expenses become the most substantial cost burden. “Reducing energy costs by 10 to 30% can mean substantial savings—tens of billions of dollars,” Anandan notes.
The importance of these incremental efficiency improvements is not lost on industry observers, especially as C2i prepares to put these solutions to the test.
Upcoming Validation of C2i’s Solutions
C2i aims to validate its claims swiftly, expecting its initial silicon designs to return from fabrication between April and June. These designs will undergo rigorous performance evaluations with data-center operators and hyperscalers eager to assess their viability. The Bengaluru-based startup has built a competent team of around 65 engineers and is actively establishing customer-facing operations in the U.S. and Taiwan for potential early deployments.
Challenges in the Power Delivery Sector
Power delivery systems have been a significant element of the data-center stack and have predominantly been managed by established incumbents with substantial financial resources and long qualification cycles. While newer companies often target individual components, C2i’s approach of redesigning the entire power delivery system presents unique challenges. This capital-intensive strategy requires synchronizing various elements such as silicon design, packaging, and system architecture—a feat that requires considerable time to prove successful in real-world environments.
Anandan points out that the success of C2i hinges on execution. All startups inherently face risks in technology, market dynamics, and team capabilities. However, a quicker feedback loop is anticipated for C2i, as upcoming silicon tests and initial customer validations will reveal the effectiveness of their novel solutions.
India’s Maturing Semiconductor Ecosystem
This venture also highlights the evolving semiconductor design landscape in India. Anandan draws parallels to the early days of e-commerce in 2008, stating, “The semiconductor sector in India is just getting started.” The country boasts an increasingly skilled pool of engineering talent, and supporting government policies have made launching semiconductor projects easier and less risky. These conditions are enabling startups like C2i to target global markets rather than merely serving as design arms for larger firms.
Conclusion: The Future of Power Solutions in AI Data Centers
As C2i begins to validate its system-level power solutions with customers over the coming months, all eyes will be on its ability to revolutionize the way power is delivered in AI data centers. Should they succeed, their innovations could usher in substantial operational efficiencies, significantly impacting the economics of AI infrastructure on a global stage. The industry is poised to witness whether C2i can transform its ambitious vision into a competitive reality within the fast-evolving semiconductor landscape.
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