Hyperscale Power is the latest startup to challenge 140-year-old transformer tech

For over 140 years, the iron-core transformer has been a staple of the electrical grid, serving both traditional power systems and modern AI enterprises. While these devices are known for their reliability, their bulky design raises concerns as the demand for power in data centers surges and renewable energy sources gain traction. This age-old technology may soon face its ultimate challenge. Enter the solid state transformer, a potential game-changer that has recently attracted significant attention from investors. In just a few months, startups focused on this innovative technology have secured $280 million in funding. These advanced transformers promise to reduce the number of components needed for data centers, enhance grid stability, and minimize the space required for power conversion equipment. Hyperscale Power is at the forefront of this movement, claiming to offer an even more compact solution. The company recently announced it raised €5 million in seed funding, spearheaded by World Fund and Vsquared Ventures, to develop a prototype of their transformer. Co-founder and CEO Daniel Rothmund emphasized the uniqueness of their design, stating, "We haven’t seen something that is as small as our system will be." The solid state transformer sector has rapidly evolved, transforming from a niche market to a competitive landscape, with notable players like Amperesand, DG Matrix, and Heron Power collectively raising over $330 million, as reported by PitchBook. Although some might view Hyperscale Power as entering a crowded field, Rothmund and his co-founder Sami Pettersson have been dedicated to this technology for several years. Rothmund, who earned his PhD at ETH Zürich, created a solid-state transformer with a remarkable efficiency of 99.1%. Hyperscale Power aims to push boundaries further by developing transformers that can operate at much higher frequencies than their competitors. This innovation allows the transformers to handle power in the tens of kilohertz range, streamlining the voltage transformation process. As data centers evolve, space has become a critical factor. The latest server racks from Nvidia require over 100 kilowatts of power, with future models projected to demand up to 1 megawatt, enough energy to supply 1,000 homes. At this scale, the transformers and rectifiers necessary to power the servers will become significantly larger. Rothmund noted, "It’s more than twice as large as the server racks themselves." The rapid advancements in AI and data center infrastructure have made solid state transformers essential. Rothmund asserted the urgency of developing this technology, stating, "It will actually slow down the progress in scaling up data centers if you don’t have solid state transformers ready quite soon. It’s not a question of if solid state transformers will come, but when they will come."