This column is a look back at the week that took place in AI. Read the previous here.
It’s been hard to scroll through the tech headlines this week without reading something about the billions of dollars being invested in data centers.
The world’s largest asset manager, Blackstone Group, would have plans to invest $8.2 billion to develop data centers in Spain. Energy and data center company Crusoe Energy Systems announced it had raised $3.4 billion in debt financing – and would have will raise an additional equity investment led by Founders Fund — for a data center in Texas that will be used for OpenAI. And pension fund AustralianSuper announced that it had committed $1.5 billion to become a minority shareholder in Databasean enterprise data center provider in North America.
Of course, all of this is just from this week and doesn’t even mention the fact that Amazon plans to invest $100 billion in AI data centers over the next decade, nor the OpenAI projects and Microsoft joint data center project which is expected to cost $100 billion.
This increased level of investment appears to be starting to trickle down to the startup space. So far this year, $1.3 billion has been invested in database-related startups – those that provide connectivity, efficiency or other tools/solutions needed by centers – per Crunchbase data.
Funding raises for data center-related startups this year already nearly match the total raised in 2023 and could even reach nearly $1.9 billion for similar startups received in 2022 if the last two and a half months of the year are solid.
Of course, this week helped a lot, with Lightmatter block $400 million Series D led by new investor Price T. Rowe at a valuation of $4.4 billion. The startup uses light to connect chips together and perform calculations for the deep learning needed for AI.
The week also saw Xscape Photonics — a startup also using photonics technology to address AI data center energy, performance and scalability challenges — raises $44M Series A round led by IAG Capital Partners and with investments from Cisco Investments And Nvidia.
It seems like it should only be a matter of time before more similar data center-related startup launches are announced, as big tech invests billions in the new data centers needed to maintain the promise of AI. These centers will need new innovations – especially when it comes to solving the problem of energy consumption – and it is likely that Big Tech and venture capital firms will be there to provide the necessary money to the development of these new technologies.
What caught our attention and other things:
- The increase in Xscape is not the only one to have caught our interest this week. Path roboticsa startup using AI in robotic welding systems in the manufacturing industry, announced that it has closed $100 million in new investments over the past year, led by Generate capital And Matter Venture Partners. The Columbus, Ohio-based company currently has two robotic welding products on the market, both leveraging vision systems, artificial intelligence and machine learning to autonomously weld parts steel. Founded in 2018, Path has raised $170 million per company.
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Illustration: Dom Guzman
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