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

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

C2i (which stands for 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.

The investment comes as demand for data center energy accelerates worldwide. Electricity consumption from data centers is expected to nearly triple by 2035, according to a December 2025 report from BloombergNEF, while Goldman Sachs Research estimates that demand for data centers could increase by 175% in 2030 from 2023 levels – the equivalent of adding another top-10 power-consuming country.

Much of this load comes not from generating electricity, but from converting it efficiently inside data centers, where the high-voltage current must be stepped down thousands of times before it reaches GPUs. This process currently wastes about 15% to 20% of energy, C2i co-founder and CTO Preetam Tadeparthy said in an interview.

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

Founded in 2024 by former Texas Instruments power executives Ram Anant, Vikram Gakhar, Preetam Tadeparthy and Dattatreya Suryanarayana, along with Harsha SB and Muthususubramanian NV, C2i redesigns the power supply as a simple plug-and-play “net-to-GPU bus system” for the data center system itself.

By treating power conversion, control, and packaging as an integrated platform, C2i estimates it can reduce end-to-end losses by about 10%—about 100 kilowatts saved for every megawatt consumed—with knock-on effects for cooling costs, GPU utilization, and overall data center economics.

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

For Peak XV Partners (which split from Sequoia Capital in 2023), the attraction lies in how power costs shape the economics of AI infrastructure at scale. Rajan Anandan, the venture firm’s CEO, told TechCrunch that after the upfront capital investment in servers and facilities, energy costs become the dominant ongoing expense for data centers, making even incremental efficiency gains very valuable.

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

The claims will quickly be tested. C2i expects its first two silicon designs to return from manufacturing between April and June, after which the startup plans to validate performance with data center operators and hyperscalers who have asked to review the data, according to Tadeparthy.

The Bengaluru-based startup has built a team of about 65 engineers and is setting up customer-facing operations in the US and Taiwan as it prepares for early deployments.

Power is one of the most entrenched parts of the data center stack, long dominated by large incumbents with deep balance sheets and years-long qualification cycles. While many newer companies focus on improving individual components, power supply redesign requires end-to-end coordination of silicon, packaging and system architecture simultaneously—a capital-intensive approach that few startups attempt and one that can take years to prove in production environments.

Anandan said the real issue now is execution, noting that all startups face technology, market and team risks when betting on how industries are evolving. In C2i’s case, he said, the feedback loop should be relatively short. “We will know in the next six months,” Anandan said, pointing to upcoming silicon and early customer validation as the moment when the thesis will be tested.

The bet also reflects how India’s semiconductor design ecosystem has matured in recent years.

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

He pointed to the depth of engineering talent — with a growing share of global chip designers based in the country — along with government-backed design-linked incentives that have lowered costs and the risk of tape-outs, making it increasingly profitable for startups to build globally competitive semiconductor products from India, rather than merely acting as captive design centers.

Whether these factors translate into a globally competitive product will become clearer over the coming months as C2i begins validating its system-level power solutions with customers.