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

Power, rather than computing power, is quickly becoming the limiting factor in scaling AI data centers. This shift has prompted Peak XV Partners to rally around C2i semiconductorsan Indian startup building plug-and-play system-level energy 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 the demand for energy in data centers increases worldwide. According to a December 2025 report from BloombergNEF, data center electricity consumption is expected to nearly triple by 2035, while Goldman Sachs Research estimates data center power demand could increase by 175% by 2030 compared to 2023 levels – the equivalent of adding one more energy consuming country to the top 10.

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

“What used to be 400 volts has already moved up to 800 volts and is likely to go even 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 S. B and Muthusubramanian N. V, C2i redesigns the power supply as a single plug-and-play ‘grid-to-GPU’ system that includes the data center bus to the processor itself.

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

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

For Peak Rajan Anandan, the venture capital firm’s managing director, told TechCrunch that after the initial capital investments in servers and facilities, energy costs become the dominant ongoing costs for data centers, making even incremental efficiency gains highly valuable.

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

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

The Bengaluru-based startup has built a team of around 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 long qualifying cycles. While many newer companies focus on improving individual components, end-to-end power redesign requires coordinating silicon, packaging and system architecture simultaneously – a capital-intensive approach that few startups attempt and that can take years to prove in production environments.

Anandan said the real question now is execution, noting that all startups face technology, market and team risks as they gamble on the way industries evolve. In the case of C2i, the feedback loop should be relatively short, he said. “We’ll know in the next six months,” Anandan said, pointing to upcoming silicon and early customer validation as when the thesis will be tested.

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

“The way to look at semiconductors in India is: This looks like the e-commerce of 2008,” says Anandan. “It’s just beginning.”

He pointed to the depth of engineering talent – ​​with a growing share of global chip designers based in the country – in addition to government-backed design-related incentives that have reduced the cost and risk of tape-outs, making it increasingly feasible for startups to build globally competitive semiconductor products from India rather than just operating as in-house design centers.

Whether these conditions translate into a globally competitive product will become clearer in the coming months as C2i begins to validate its system-level power solutions with customers.