The 140-year-old iron-core transformer, a cornerstone of the global electrical grid and AI infrastructure, is facing obsolescence. As data center energy demands soar and renewable integration complicates grid management, startups are racing to replace this aging, bulky technology with solid-state transformers (SSTs). The latest entrant, Hyperscale Power, has officially entered the arena with a €5 million seed round to develop its ultra-compact prototype.
The Shift to Solid-State Efficiency
Solid-state transformers are poised to revolutionize power conversion by significantly reducing component counts, enhancing grid stability, and minimizing the physical footprint of electrical equipment. While the iron-core model has been the “if it ain’t broke, don’t fix it” standard for over a century, the sheer scale of modern AI power requirements is forcing a pivot toward more efficient digital alternatives.
Hyperscale Power, led by CEO Daniel Rothmund and co-founder Sami Pettersson, aims to outperform current market solutions by operating at significantly higher frequencies. By stepping up incoming power into the tens of kilohertz range before transforming it, the company claims it can achieve a level of miniaturization previously unseen in the industry.
Meeting the AI Power Density Crisis
The urgency behind this innovation is driven by the rapid evolution of server architecture. Modern Nvidia server racks already consume over 100 kilowatts, with projections moving toward 1-megawatt capacities—the equivalent of powering 1,000 homes. Currently, the infrastructure required to support these racks is gargantuan.
“It’s more than twice as large as the server racks themselves,” Rothmund noted, highlighting the space constraints currently plaguing data center developers. Without the rapid adoption of solid-state technology, the physical size of power-conversion equipment risks becoming a primary bottleneck for the expansion of AI computing power.
A Competitive Landscape
The solid-state transformer market has shifted from virtually non-existent to highly competitive in just two years. Startups in this space have collectively secured over $330 million in funding. Notable competitors include:
- Amperesand: Incubated by Temasek’s early-stage fund.
- DG Matrix: Backed by industrial giant ABB.
- Heron Power: Founded by former Tesla executive Drew Baglino and supported by Andreessen Horowitz.
Despite being a newer player, Hyperscale Power leverages significant technical pedigree. Rothmund’s background includes doctoral research at ETH Zürich, where he successfully designed a solid-state transformer boasting 99.1% efficiency. As the industry approaches a critical juncture, the question for developers is no longer whether solid-state transformers will replace traditional iron-core models, but how quickly they can be deployed to sustain the next generation of data centers.