Exowatt Inc., a solar-thermal energy startup supported by notable investors including OpenAI Group’s CEO Sam Altman, is addressing the escalating energy demands of artificial intelligence (AI) data centers with an innovative solution involving millions of heated rocks.
Recently, the company secured $50 million in funding, with this financing round led by MVP Ventures and 8090 Industries, alongside contributions from Atomic, Bridge Bay Ventures, The Florida Opportunity Fund, DeepWork Capital, Dragon Global, and Massive VC. This funding is part of an extension to Exowatt’s previous $70 million Series A funding, which concluded in April. Altman’s involvement traces back to their initial seed investment in 2024.
Exowatt’s unique thermal battery technology, driven by solar energy, has the potential to provide electricity to AI data centers at an astonishing rate of one cent per kilowatt-hour—approximately 90% lower than the average U.S. grid rate. Given this cost advantage, major tech companies like Microsoft Corp., Amazon Web Services Inc., Google LLC, and Oracle Corp. are likely to take an interest, especially as the competition for reliable energy sources intensifies amidst rapid data center expansion.
These data centers currently consume about 1% of global electricity, a figure expected to rise to 3-4% by the end of the decade due to AI growth. However, prolonged grid connection delays in some regions have created a critical need for alternative power solutions.
Exowatt’s strategy leverages superheated rocks stored as thermal batteries, using concentrated solar power to heat specially designed materials to temperatures reaching 1,200°C. This method allows for energy release through steam turbines, generating electricity even after sunset. By utilizing these thermal storage systems, Exowatt aims to deliver electricity at significantly lower costs compared to traditional sources, which typically range from 8-15 cents per kWh.
Despite its promising technology, Exowatt faces the challenge of scaling its manufacturing to produce one million thermal battery units annually to meet its cost goals. While the prospect of achieving such scale remains daunting, the company has garnered sufficient investor confidence to pursue this target.
In the broader conversation on energy solutions, Altman has been vocal about addressing power dependencies in the AI sector. Competitors in the industry, such as Meta Platforms Inc., are exploring nuclear energy commitments, while Google LLC and Amazon continue to invest in nuclear startups.
Renewable resources offer an alternative but require reliable storage solutions to support AI’s continuous power needs. Existing lithium-ion batteries, while common, face issues related to cost and the sustainability of their supply chains. In contrast, Exowatt’s rock-based storage systems boast advantages in both affordability and longevity, maintaining heat for up to five days without degradation—a significant improvement over traditional battery technologies.
However, doubts remain regarding the practical performance and scalability of Exowatt’s systems. Historical challenges with solar-thermal projects, including efficiency and maintenance issues, necessitate a demonstration of reliability before full deployment. Currently, Exowatt has not established a specific timeline for technology rollout or secured major clients.
Nonetheless, empowered by strategic funding and growing demand, Exowatt is positioned to significantly contribute to the future energy landscape for AI applications, potentially transforming its innovative concepts into realities.
