C2i Semiconductors Secures $15M to Revolutionize AI Data Center Power Efficiency
In the rapidly evolving landscape of artificial intelligence (AI), data centers are encountering a formidable challenge: power consumption is becoming a critical bottleneck, surpassing even computational limitations. Addressing this pressing issue, Peak XV Partners has led a $15 million Series A funding round for C2i Semiconductors, an innovative Indian startup dedicated to enhancing energy efficiency in large-scale AI infrastructures.
The Growing Energy Demand in AI Data Centers
As AI applications proliferate, data centers worldwide are experiencing an unprecedented surge in energy consumption. A December 2025 report from BloombergNEF projects that electricity usage by data centers will nearly triple by 2035. Similarly, Goldman Sachs Research anticipates a 175% increase in data center power demand by 2030 compared to 2023 levels, equating to the addition of another top-10 power-consuming nation.
This escalating demand is not solely due to the generation of electricity but also stems from inefficiencies in power conversion within data centers. High-voltage power must be stepped down multiple times before reaching GPUs, a process that currently results in energy losses of approximately 15% to 20%. Preetam Tadeparthy, co-founder and CTO of C2i, highlights this inefficiency, noting that voltage levels have already increased from 400 volts to 800 volts and are expected to rise further.
C2i’s Innovative Approach to Power Efficiency
Established in 2024 by former Texas Instruments power executives—Ram Anant, Vikram Gakhar, Preetam Tadeparthy, and Dattatreya Suryanarayana—alongside Harsha S. B and Muthusubramanian N. V, C2i Semiconductors is pioneering a comprehensive grid-to-GPU power delivery system. This plug-and-play solution integrates power conversion, control, and packaging into a unified platform, aiming to reduce end-to-end energy losses by approximately 10%. This improvement translates to saving around 100 kilowatts for every megawatt consumed, thereby enhancing cooling efficiency, GPU utilization, and overall data center economics.
Tadeparthy emphasizes the direct impact of these advancements on total cost of ownership, revenue, and profitability for data centers.
Strategic Investment by Peak XV Partners
For Peak XV Partners, formerly part of Sequoia Capital, the investment in C2i aligns with a strategic focus on optimizing AI infrastructure economics. Rajan Anandan, the venture firm’s managing director, underscores the significance of energy costs as the predominant ongoing expense for data centers. He points out that even a modest reduction in energy costs—ranging from 10% to 30%—can result in substantial financial savings, potentially amounting to tens of billions of dollars.
Anandan acknowledges the inherent risks associated with such investments, including technological, market, and team-related challenges. However, he expresses confidence in C2i’s approach, noting that the feedback loop for validating their solutions is relatively short, with anticipated results within the next six months.
The Road Ahead for C2i
C2i is on track to receive its first two silicon designs from fabrication between April and June. Following this, the startup plans to validate performance with data center operators and hyperscalers who have expressed interest in reviewing the data. Based in Bengaluru, C2i has assembled a team of approximately 65 engineers and is establishing customer-facing operations in the U.S. and Taiwan to facilitate early deployments.
The power delivery sector within data centers has long been dominated by established incumbents with substantial resources and extended qualification cycles. While many new entrants focus on enhancing individual components, C2i’s holistic approach—redesigning power delivery from end to end—requires coordinated efforts across silicon, packaging, and system architecture. This capital-intensive strategy is ambitious but holds the potential for significant impact.
India’s Evolving Semiconductor Landscape
Anandan draws parallels between India’s current semiconductor design ecosystem and the country’s e-commerce sector in 2008, suggesting that the industry is just beginning to realize its potential. He highlights the depth of engineering talent in India, with a growing number of global chip designers based in the country. Additionally, government-backed design-linked incentives have reduced the cost and risk associated with tape-outs, making it increasingly feasible for startups to develop globally competitive semiconductor products from India.
As C2i embarks on validating its system-level power solutions with customers, the coming months will be crucial in determining the startup’s ability to deliver on its promises and contribute to alleviating the power constraints faced by AI data centers.
