The best AI investment might be in energy tech

9:15 PM IST · March 20, 2026

Venture capitalists have placed increasingly bigger bets on AI startups, investingover half a trillion dollarsinto the sector over the last five years. But these days, the smartest AI investment might be in energy,accordingto a report by Sightline Climate. Researchers found that up to 50% of data center projects that have been announced might be delayed. One of the biggest culprits is access to power. Of the 190 gigawatts worth of data centers the company is tracking, only 5 gigawatts are under construction. About 6 gigawatts of data center projects in Sightline’s database came online last year. A far larger percentage — about 36% — saw their timelines slip in 2025. The delays may eventually trickle down and affect large enterprises and other companies that use AI for their businesses. That supply-demand squeeze is an opportunity for investors. Here’s why. Big tech companies like Google and Meta have devoted large parts of their balance sheets to develop solar, wind, and nuclear projects. These companies are also supporting emerging technologies likeForm Energy’s 100-hour batterythrough direct investments and working with utilities to accelerate their adoption. Dozens of startups are pursuing technologies that tackle the power problem. For instance, Amperesand, DG Matrix, and Heron Power are developingnew power conversion technologies, while companies like Camus, GridBeyond, and Texture arebuilding softwarethat can manage the flow of electrons. Power remains one of the most significant constraints for data centers, a shortfall that isn’t likely to change anytime soon. AI is expected to drive data center power consumption up 175% by 2030,accordingto Goldman Sachs. These shortages on the grid are unprecedented in modern times, and they’ve been driving up electricity prices around the country. That has pushed many tech companies to explore alternative ways of powering their data centers. (The Trump administration, sensing a looming political crisis, isurging tech companiesto build their own power source, pay higher rates, or both. Most had already made plans to do so, of course.) Amazon, Google, Oracle, and other large tech companies have been working to minimize their dependence on the grid. Several data centers are being planned using on-site power or a hybrid approach that blends on-site power with a grid connection. The biggest data centers are leading the charge. Less than a quarter of projects that have identified a power source will use on-site or hybrid; together they represent 44% of total capacity. The shift has been driven in part by shortages of power generation equipment — namelygas turbines— and an antiquated grid. That’s opened a path for alternative energy sources. Google’s latest deal to power a new data center in Minnesota shows one approach to tackling the problem. The company willblend wind and solar with a massive 30 gigawatt-hour batteryfrom Form Energy. Google also worked with Xcel Energy to devise a new rate structure that it says will help encourage the adoption of new technologies in the utility’s planning process. Form Energy’s battery isn’t the only example. Grid-scale batteries are poised to take a big bite out of the power market. By the end of this year, the U.S. should have nearly 65 gigawatts of battery storage capacity,accordingto the U.S. Energy Information Administration. Like many of its peers, Form Energy is looking to capitalize on the momentum byraising a $500 million roundin advance of an eventual IPO. Energy supplies are only part of the story. Once the power hits the grid or the data center, it needs to be managed, a task that mostly falls on the humble transformer. Most of today’s transformers use massive blocks of iron wrapped in copper wire, a technology that is about 140 years old. It’s reliable, but it’s becoming far too bulky as data center power demands ramp up. By the time server racks hit 1 megawatt in power density, the power equipment needed to run them will occupy twice as much space as the rack itself, one expert told TechCrunch. It’s why investors have beenflocking to back solid-state transformer startupsrecently, which are hoping silicon-based power electronics can supplant the ancient iron-and-copper tech. They’re more expensive than existing transformers, but they are also flexible enough to replace several pieces of equipment in a data center, which should make them cost competitive. Altogether, the scale of investments in battery and transformer companies has been much smaller than some of the blockbuster rounds we’ve seen in the AI industry. That’s not a bad thing — those rounds are more tractable for investors. Plus, as the world electrifies everything from transportation to heavy industry, the need for power is only going to grow, giving investors a hedge against an AI bust. Maybe the best AI investment isn’t in AI at all.

Latest AI News

View All News →

There aren’t enough rockets for space data centers — Cowboy Space raised $275M to build them

The apparently insatiable demand for AI compute has data center entrepreneurs looking to the stars. There’s a key problem: There aren’t enough rockets to put data centers in orbit around Earth, and they’re too expensive. Most of the players are hoping that SpaceX’s Starship — expected to make its twelfth test flight as soon as this weekend— will solve the problem. But once the vehicle is operational it may be years before it is commercially available, given SpaceX’s internal satellite business. Thesame is truefor Blue Origin’s New Glenn rocket, which failed to deliver a satellite during its third launch in April. That leaves space data center schemes either targeting the mid 2030s, like Google Suncatcher, or preparing to start off doing edge processing tasks for space sensors, likeStarcloud. In theory, there’s a third way: “We’re standing up our own rocket program,” Baiju Bhatt, the CEO and founder of Cowboy Space Corporation, told TechCrunch. He expects the first launch before the end of 2028. Today, the company announced the closure of a $275 million Series B round at a post-money valuation of $2 billion, led by earlier backer Index Ventures, as a downpayment on that work. Breakthrough Energy Ventures, Construct Capital, IVP, and SAIC also participated. The company had previously raised $80 million from investors, including Index, Breakthrough Energy Ventures, Andreessen Horowitz, and New Enterprise Associates. Bhatt, a co-founder of online stock platform Robinhood, launched this startup in 2024 as Aetherflux, with plans to collect abundant solar energy in space and beam it down to Earth. The idea of space data centers led the company to pivot towards using its electricity while in orbit. Thepractical realitiesof that effort, in turn, led him to a rocket development program, and the company’s new name. Bhatt said he spoke to multiple launch providers to try and find a path where his company would only build satellites, but he couldn’t find enough launch capacity to truly scale an orbital data center business, or do so in a way where the unit economics could compete with terrestrial alternatives. "There's a lot of new rockets that are coming online, but as we look three, four years out, it's still very, very scarce, and I think that you're going to see a lot of the first party rocket providers actually specialize into their own payloads," Bhatt said. Of course, while bringing the rocket in-house is logical, it's also nuts. Only a handful of private companies in the West, mainly SpaceX, Rocket Lab and Arianespace, are consistently launching commercial rockets. Two others, Blue Origin and United Launch Alliance, have been struggling to drag their vehicles out of development hell for years. A number of startups, including Stoke Space, Firefly Aerospace, and Relativity Space, have worked for years and are still waiting to deliver operational systems. This evolution of the company will also bring Cowboy Space Corporation into direct competition with SpaceX and Blue Origin, the most advanced and well-funded players in the market. "The prize here, and the size of this market, is big enough that there's room for many players to succeed," Bhatt said "I see the demand for AI getting more and more acute, and I see the options on Earth getting more and more limited." One advantage, Bhatt argues, is the company's focus on this single market (data centers), and its unique design. Orbital rockets typically have a booster stage that flies the vehicle to the edge of space, and a second stage that carries the payload and delivers it to orbit. Cowboy Space plans to build its data centers directly into the second stage of its rocket. It's actually a bit of a throw-back: The first US satellite, Explorer 1, was built as the final stage of a rocket, filled with radio equipment and a few scientific instruments. Making the rocket purpose-built only to launch its data-center satellites should simplify the design process. The company expects each satellite to have a mass of 20,000 to 25,000 kilograms and to generate 1 MW of power for just under 800 onboard GPUs. That means its rocket would be slightly more powerful than the SpaceX's workhorse Falcon 9, though still smaller than its under-development Starship. Eventually, Bhatt says, he expects the booster to be reusable. Cowboy Space has hired veterans of the space industry, including former Blue Origin propulsion engineer Warren Lamont and former SpaceX launch director Tyler Grinne. The company also plans to build its own rocket engine, the most complex and expensive part of any launch vehicle. Cowboy Space is still working through key development needs, like facilities to test, manufacture and launch its rockets. The new vision comes with a new name for the startup, to emphasize its mission to "power humanity from the high frontier," although Bhatt admits "it gives me a reason to wear a cowboy hat and also grow this sick mustache."

5 hours ago

View

Digg tries again, this time as an AI news aggregator

Digg is back from the dead. Again. Just months afterlaunching, therebootof Kevin Rose’s once-popular link-sharing siteshut down in March, as the company shifted course. Originally redesigned as acompetitorto the massive community forum site Reddit, the new Digg found that it wasn’t able to effectively manage the bot traffic invading its platform and hadn’t differentiated itself enough from the competition to make an impact. The startup laid off staff and said it was time to go back to the drawing board. Rose, a partner at True Ventures, returned to work full-time on a new version of Digg in April. On Friday evening, the founderprevieweda link to the newly redesignedDigg, which now looks nothing like a Reddit clone and more like the news aggregator it once was. a little project i've been hacking on:https://t.co/zTuwWy44lybugs expected. more topics soon. This time around, the site is focused on ranking news — specifically, AI news to start. In an email to beta testers, the company said the site’s goal is to “track the most influential voices in a space” and to surface the news that’s actually worth “paying attention to.” AI is the area it’s testing this idea with, but if successful, Digg will expand to include other topics. The email warned that the site was still raw and “buggy,” and was designed more to give users a first look than to serve as its public debut. On the current homepage, Digg showcases four main stories at the top: the most viewed story, a story seeing rising discussion, the fastest-climbing story, and one “In case you missed it” headline. Below that is a ranked list of top stories for the day, complete with engagement metrics like views, comments, likes, and saves. But the twist is that these metrics aren’t the ones generated on Digg itself. Instead, Digg is ingesting content from X in real-time to determine what’s being discussed, while also performing sentiment analysis, clustering, and signal detection to determine what matters most. As Roseremarked on X,when OpenAI CEO Sam Altman engages with a story about AI, it almost always sets off a chain reaction that includes deep discussion and propagation of that topic throughout X. The new Digg will be able to track that increased engagement. This might be something that’s interesting to data nerds, as it exposes the impact of X-based engagement with charts and graphs, and offers a way to track signal among what can, on X, often be a lot of noise. But it’s unclear whether there’s enough underlying value here for an everyday user, beyond seeing that yes, a@samatweet can make something go viral. The site also ranks the top 1,000 people involved in AI, as well as the top companies and the top politicians focused on AI issues. For those who don’t have time to spend on X tracking breaking AI news, Digg could prove a useful resource. But it’s not clear why people would regularly turn to Digg over their preferred news app, RSS reader, or even their X “For You” feed, if they wanted to catch up on what’s trending — especially because there isn’t currently any discussion happening on Digg’s site itself. Digg may also struggle when it moves on to other topics, as AI news is one of the few areas where discussion still heavily takes place on X. Other verticals don’t have the same traction, especially after Musk’s takeover of the site formerly known as Twitter gave rise to an ecosystem of competitors, which now includes Meta’s creator-focused Threads. Many non-tech-related discussions are now happening off X, or off the public internet entirely. However, if Digg does end up gaining steam, it could serve as a useful source of website traffic to publishers whose businesses have been decimated bydeclining clicksthanks to Google’s changing algorithms andthe impact of AI Overviews, the AI-generated summaries Google displays atop search results, which often answer users’ questions before they ever click through to a website.

5 hours ago

View

OpenAI Launches $4 Billion Deployment Company Backed by Top Investors

The Deployment Company will function as a standalone business unit while remaining closely connected to OpenAI’s research and product teams.

5 hours ago

View

Delhi-NCR Raises $1.7 Billion in Q1 2026 Driven by Large Funding Rounds

Gurugram dominated the funding landscape, attracting 52% of all capital raised in the region, equivalent to $876 million.

9 hours ago

View

Quick Links

AI Tools by Task

Alternatives

Best AI Tools

Top AI Tools

Browse & Compare

AI Insights

Submit your Tool

Submit AI Tools – The ultimate platform to discover, submit, and explore the best AI tools across various categories.

PoweredByAI.app is an AI Tools Directory helping individuals, businesses, and creators discover the best AI tools for writing, coding, design, productivity, and more.

Contact Promote Analytics Terms of Service Refund Policy Privacy Policy