The Shift in AI Data Center Infrastructure: Power as the New Limiting Factor
As artificial intelligence (AI) continues to scale, the demand for energy in data centers is rapidly outstripping traditional limitations posed by computing power. This evolving landscape has prompted strategic investments in companies like C2i Semiconductors, an Indian startup poised to revolutionize energy consumption in large-scale AI infrastructure.
Introduction to C2i Semiconductors
C2i, which stands for Control, Conversion, and Intelligence, recently secured $15 million in a Series A funding round led by Peak XV Partners, alongside contributions from Yali Deeptech and TDK Ventures. This investment brings the total funding for the two-year-old startup to an impressive $19 million.
The Growing Demand for Energy in Data Centers
The appetite for electricity among data centers shows no signs of slowing down. According to a report from BloombergNEF, global electricity consumption from data centers is projected to nearly triple by 2035. Furthermore, Goldman Sachs Research estimates a staggering 175% increase in power demand by 2030 compared to 2023 levels—akin to adding another top-10 power-consuming nation.
The Problem: Inefficient Energy Conversion
A significant portion of energy waste in data centers arises not from electricity generation but from inefficient conversion processes. High-voltage power must be reduced thousands of times before reaching GPUs, leading to energy losses estimated between 15% and 20%. Preetam Tadeparthy, C2i’s co-founder and CTO, emphasized that while the voltage standard has already shifted from 400 to 800 volts—and will likely go even higher—inefficiencies remain a pressing issue.
Innovative Solutions with C2i’s Technology
Founded in 2024 by a team of former Texas Instruments power executives, including Ram Anant, Vikram Gakhar, Preetam Tadeparthy, and Dattatreya Suryanarayana, C2i is reimagining power delivery systems. Their solution focuses on integrating power conversion, control, and packaging into a singular, plug-and-play “grid-to-GPU” system, aimed at reducing end-to-end energy losses by approximately 10%. This translates to an energy conservation of about 100 kilowatts saved for every megawatt consumed, significantly impacting cooling costs, GPU utilization, and overall data-center efficiency.
C2i co-founders Vikram Gakhar, Preetam Tadeparthy, Ram Anant, and Dattatreya Suryanarayana (Left to right)
Image Credits:C2i
Impact on Data Center Economics
Tadeparthy highlighted how these innovations translate directly into lower total costs of ownership, increased revenue, and improved profitability for data center operators. Rajan Anandan, managing director of Peak XV Partners, further noted that energy costs become the dominant expense for data centers after initial capital investments. Incremental efficiency gains in energy utilization are invaluable, with reductions of 10% to 30% representing significant cost savings in the range of tens of billions of dollars.
Looking Ahead: Testing and Validation
C2i is gearing up for immediate testing; the company anticipates that its first two silicon designs will return from fabrication by mid-2026. Performance validation will involve collaboration with data center operators and hyperscalers eager to assess the system’s effectiveness.
The Broader Context: India’s Evolving Semiconductor Landscape
C2i’s emergence also reflects the maturation of India’s semiconductor design ecosystem. Anandan likened the current environment to the landscape of e-commerce in 2008, suggesting that the semiconductor sector is only beginning to realize its potential. The accumulation of engineering talent and government-backed incentives has made it easier for startups to thrive and create globally competitive products.
Conclusion
The ongoing developments at C2i Semiconductor represent a critical moment in the evolution of data center technology. In a world where power constraints increasingly define the future of AI infrastructure, the success of C2i’s innovative approach to power delivery could pave the way for greater efficiency and sustainability in the sector. As the industry closely monitors C2i’s progress, it will soon become evident how this technology will shape the landscape of AI data centers moving forward.
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Image Credit: techcrunch.com
