The 140-year-old iron-core transformer, a reliable mainstay of the electrical grid and data centers, is facing limits due to skyrocketing power demands from AI and the rise of renewables. Its electronic replacement, the solid-state transformer, is gaining momentum as a more compact and efficient alternative, with startups in the sector raising hundreds of millions in funding.
A new contender, Hyperscale Power, recently raised a €5 million seed round to build a prototype it claims will be exceptionally small by operating at much higher frequencies than competitors. The company argues that solid-state transformers are becoming a necessity to support the aggressive growth of high-density AI data centers, where traditional power equipment is becoming prohibitively large.
The main topics covered are the limitations of traditional iron-core transformers, the emergence and investment in solid-state transformer technology, and the specific approach and competitive landscape within this emerging market.
The iron-core transformer is the 140-year old technology that props up both the electrical grid and AI companies. The devices are clunky but reliable, which explains why they’re still in use: if it ain’t broke, don’t fix it.
Yet as the data center power demand skyrockets and batteries and renewables carve out larger portions of the grid, the ancient technology might finally be hitting its limit. Fortunately, their electronic replacement — the solid state transformer — could be having its moment, and not a moment too soon.
In the last few months, startups specializing in solid state transformers have raised $280 million. The technology promises to slash the number of components needed by data centers, improve the stability of the grid, and shrink the footprint of power conversion equipment.
Now, Hyperscale Power says it can slim things down further. “We haven’t seen something that is as small as our system will be,” Daniel Rothmund, co-founder and CEO at Hyperscale Power, told TechCrunch.
To build a prototype of the transformer, Hyperscale recently raised a €5 million seed round led by World Fund and Vsquared Ventures, the company exclusively told TechCrunch.
In the past couple of years, the solid state transformer market went from nearly nonexistent to almost crowded. Among the competitors are Amperesand, which was incubated by Temasek’s early stage fund; DG Matrix, which counts industrial giant ABB as an investor; and Heron Power, which was founded by former Tesla executive Drew Bagnlino and is backed by Andreessen Horowitz. Together, they’ve raised over $330 million, according to PitchBook.
Hyperscale would appear to be late to the party, but both Rothmund and his co-founder Sami Pettersson have been working on the technology for a while. Rothmund, especially: he completed his PhD at ETH Zürich in part by designing and building a 99.1% efficient solid-state transformer.
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All solid state transformers are smaller than iron-core equivalents, but Hyperscale says it has a way to go further by building a transformer that can work at much higher frequencies than competitors. When power enters the transformer, it will be stepped up to something in the tens of kilohertz range. It’s transformed into the required voltage and then stepped back down to the necessary frequency.
Size increasingly matters inside data centers as the power density of server racks increases. The latest Nvidia racks consume more than 100 kilowatts of power, and the company is already preparing for 1 megawatt racks, enough to power up to 1,000 homes.
At those scales, the transformers and rectifiers required to prepare electricity for the servers will balloon in size. “It’s more than twice as large as the server racks itself,” Rothmund said.
The aggressive roadmaps being developed by AI companies and data center developers have made solid state transformers almost a necessity, he said.
“It will actually slow down the progress in scaling up data centers if you don’t have solid state transformers ready quite soon,” Rothmund said. “It’s not a question if solid state transformers will come, it’s a question when they will come.”
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