As AI data centers hit power limits, Peak XV backs Indian startup C2i to fix the bottleneck

Source: TechCrunch

Power Limits in AI Data Centers

Power, rather than compute, is fast becoming the limiting factor in scaling AI data centers. This shift has prompted Peak XV Partners to back C2i Semiconductors, an Indian startup building plug‑and‑play, system‑level power solutions designed to cut energy losses and improve the economics of large‑scale AI infrastructure.

Funding

C2i (Control Conversion and Intelligence) has raised $15 million in a Series A round led by Peak XV Partners, with participation from Yali Deeptech and TDK Ventures, bringing the two‑year‑old startup’s total funding to $19 million.

Market Context

• Electricity consumption from data centers is projected to nearly triple by 2035 source.
• Goldman Sachs Research estimates data‑center power demand could surge 175 % by 2030 from 2023 levels source, equivalent to adding another top‑10 power‑consuming country.

Much of that strain comes not from generating electricity but from converting it efficiently inside data centers. High‑voltage power must be stepped down thousands of times before it reaches GPUs, currently wasting 15 %–20 % of energy, according to C2i co‑founder and CTO Preetam Tadeparthy.

“What used to be 400 volts has already moved to 800 volts, and will likely go higher,” Tadeparthy told TechCrunch.

Technology

Founded in 2024 by former Texas Instruments power executives Ram Anant, Vikram Gakhar, Preetam Tadeparthy, Dattatreya Suryanarayana, along with Harsha S. B and Muthusubramanian N. V, C2i is redesigning power delivery as a single, plug‑and‑play “grid‑to‑GPU” system spanning the data‑center bus to the processor itself.

By treating power conversion, control, and packaging as an integrated platform, C2i estimates it can cut end‑to‑end losses by around 10 % — roughly 100 kW saved for every megawatt consumed — with knock‑on effects for cooling costs, GPU utilisation, and overall data‑center economics.

“All that translates directly to total cost of ownership, revenue, and profitability,” Tadeparthy said.

Investment Perspective

Peak XV Partners (which split from Sequoia Capital in 2023) sees power costs as the dominant ongoing expense for AI infrastructure at scale. Managing director Rajan Anandan told TechCrunch:

“If you can reduce energy costs by, call it, 10 % to 30 %, that’s like a huge number. You’re talking about tens of billions of dollars.”

The real test will be rapid. C2i expects its first two silicon designs to return from fabrication between April and June, after which the startup will validate performance with data‑center operators and hyperscalers.

Team & Operations

• Engineers: ~65
• Headquarters: Bengaluru, India
• Customer‑facing operations: being set up in the U.S. and Taiwan

Power delivery is one of the most entrenched parts of the data‑center stack, long dominated by large incumbents with deep balance sheets and lengthy qualification cycles. Redesigning the stack end‑to‑end requires coordinated silicon, packaging, and system architecture—a capital‑intensive approach few startups attempt.

Anandan notes that execution will be decisive: “We’ll know in the next six months,” pointing to upcoming silicon and early customer validation as the moment when the thesis will be tested.

Outlook for Indian Semiconductor Design

Anandan likens India’s semiconductor design ecosystem to the early days of e‑commerce in 2008:

“The way you should look at semiconductors in India is, this is like 2008 e‑commerce. It’s just getting started.”

He highlights a growing pool of engineering talent and government‑backed design incentives that lower the cost and risk of tape‑outs, making it increasingly viable for startups to build globally competitive semiconductor products from India rather than operating solely as captive design centers.

Whether these conditions translate into a globally competitive product will become clearer over the coming months as C2i validates its system‑level power solutions with customers.