An energy startup called Exowatt has received a $20 million investment from notable investors, including Sam Altman, CEO of OpenAI, and Andreessen Horowitz. Exowatt aims to address the massive electricity consumption of AI data centers by developing modules that store energy as heat and produce electricity using solar power.

The Bottom Line Upfront

Generative AI consumes a significant amount of energy, and the industry needs to find solutions to reduce its electricity consumption.

Exowatt's approach of using solar power and storing energy as heat could help mitigate the energy problem associated with AI data centers.

The Breakdown

Exowatt is developing shipping container-sized modules that convert solar energy into heat, which can be stored and later used to produce electricity.

The company aims to offer affordable electricity for AI data centers, with a goal of one cent per kilowatt-hour minus subsidies.

By using U.S.-made components, Exowatt intends to avoid Chinese-made parts and potentially qualify for subsidies from the Inflation Reduction Act.

The electricity consumption of data centers where AI models are trained accounts for 2% of global electricity consumption, and this percentage is expected to increase significantly in the future.

Utility companies in the U.S. are witnessing data centers as their top customer growth area, highlighting the rising demand for power in this sector.