Microsoft-Backed Startup Hits a Milestone in the Race to Power AI

The race for more advanced AI models has major tech giants like Meta and OpenAI scrambling to build massive new data centers to power their systems. Now, one Microsoft-backed startup says it’s developed a crucial piece of that puzzle.

For context, one gigawatt can power roughly 750,000 homes—that’s a lot of power. And getting that much energy flowing through these new data centers presents its own set of challenges. OpenAI’s planned facilities are expected to handle at least 7 gigawatts of compute power, while Meta’s projects aim to add another 6 gigawatts of capacity—even if it doesn’t end up using it all for AI. This has led AI companies to take extreme measures, going as far as buying up their own nuclear power plants. 

Massachusetts-based VEIR, which calls itself a superconducting power delivery solutions company, announced today that its first-generation Superconducting Technology for AI Racks (STAR) demo successfully delivered 3 megawatts of power through a single low-voltage cable. Superconductors are materials that can carry electricity with zero energy loss when kept cold enough. Just one megawatt can power roughly 500 to 1000 homes. 

The demo was conducted in a simulated data center environment near VEIR headquarters in Woburn, Massachusetts.

“The power bottleneck is the single biggest constraint for AI and data center growth,” VEIR CEO Tim Heidel said in a press release. “This demonstration marks a major milestone for VEIR and the industry, proving that superconducting power technology can deliver the high-power levels needed in a data center environment, while dramatically reducing the space and weight demanded by traditional systems.”

The traditional systems at hand rely on copper or aluminum cables and require high voltages to deliver power. They’re also inefficient, losing energy as heat through electrical resistance, and require bulky cooling and safety infrastructure to manage those losses.

In contrast, VEIR says its new technology will be able to move up to 10 times more power through smaller cables, a routing footprint for low-voltage power that’s 20 times smaller, and up to 5 times the distance coverage compared to conventional systems.

Earlier this year, VEIR raised $75 million in Series B funding, with backers including Microsoft’s Climate Innovation Fund, to accelerate commercialization. At the time, Heidel told Bloomberg that the company’s cables use superconducting tapes made of a special material that carries electricity with no electrical resistance and are cooled by liquid nitrogen. The system also allows liquid nitrogen to evaporate, adding extra cooling in the same way sweat evaporation cools the human body.

Additionally, the new tech isn’t limited to use in data centers; it could also make utilities and renewable energy facilities more efficient.

“One of the biggest challenges for greater availability of clean energy is that improved infrastructure is needed to deliver carbon-free electricity at scale,” said Brandon Middaugh, senior director of Microsoft’s Climate Innovation Fund, in a January press release. “VEIR’s technology can enhance the efficiency and sustainability of energy systems.”

In today’s announcement, Heidel said the tech is ready to be deployed, but it remains to be seen how it performs outside of the demo environment.