Power is rapidly emerging as the primary constraint in expanding AI data center operations, surpassing compute capabilities. This evolving challenge has led Peak XV Partners to invest in C2i Semiconductors, an Indian startup developing integrated, system-level power solutions that aim to reduce energy waste and enhance the financial viability of large AI infrastructure.

C2i, representing control, conversion, and intelligence, has secured $15 million in a Series A funding round. The investment was led by Peak XV Partners, with contributions from Yali Deeptech and TDK Ventures. This brings the total capital raised by the two-year-old company to $19 million.

The funding arrives amid a global surge in data center energy consumption. According to a December 2025 BloombergNEF report, electricity use by data centers is expected to nearly triple by 2035. Concurrently, Goldman Sachs Research forecasts that data center power demand could increase by 175% from 2023 to 2030—an addition equivalent to the consumption of a top-ten power-using nation.

A significant portion of this strain stems not from electricity generation, but from inefficient conversion within the data centers themselves. High-voltage power must be stepped down numerous times before reaching GPUs, a process that currently results in approximately 15% to 20% energy loss, as explained by C2i’s co-founder and CTO, Preetam Tadeparthy.

Founded in 2024 by former Texas Instruments power executives Ram Anant, Vikram Gakhar, Preetam Tadeparthy, Dattatreya Suryanarayana, Harsha S. B, and Muthusubramanian N. V, C2i is reimagining power delivery. The company is creating a unified, plug-and-play "grid-to-GPU" system that manages power from the data center bus all the way to the processor.

By integrating power conversion, control, and packaging into a single platform, C2i estimates it can reduce end-to-end energy losses by about 10%. This translates to roughly 100 kilowatts saved for every megawatt consumed, which also lowers cooling costs, improves GPU utilization, and positively impacts overall data center economics. "All that translates directly to total cost of ownership, revenue, and profitability," Tadeparthy noted.

For Peak XV Partners, which separated from Sequoia Capital in 2023, the appeal lies in how power expenses fundamentally shape the economics of large-scale AI infrastructure. "If you can reduce energy costs by, call it, 10 to 30%, that’s like a huge number," said Anandan. "You’re talking about tens of billions of dollars."

These claims will soon face real-world testing. C2i anticipates its first two silicon designs to return from fabrication between April and June. Following this, the startup plans to validate performance with data center operators and hyperscalers that have expressed interest in reviewing the data, according to Tadeparthy.

Based in Bengaluru, C2i has assembled a team of about 65 engineers and is establishing customer operations in the U.S. and Taiwan as it prepares for initial deployments.

Power delivery remains one of the most established segments of the data center stack, long dominated by large incumbents with substantial financial resources and lengthy qualification cycles. While many newer firms focus on enhancing individual components, redesigning the entire power delivery system requires the simultaneous coordination of silicon, packaging, and system architecture. This capital-intensive approach is attempted by few startups and can take years to validate in production environments.

Anandan emphasized that execution is now the critical question, acknowledging that all startups face technology, market, and team risks when betting on industry evolution. For C2i, he believes the feedback loop will be relatively short. "We’ll know in the next six months," said Anandan, pointing to the upcoming silicon results and early customer validation as key tests for the company's thesis.

This investment also highlights the maturation of India’s semiconductor design ecosystem in recent years. "The way you should look at semiconductors in India is, this is like 2008 e-commerce," Anandan observed. "It’s just getting started."

He cited the depth of engineering talent—with a growing share of global chip designers based in the country—alongside government-backed design-linked incentives that have reduced the cost and risk of tape-outs. These conditions are making it increasingly feasible for startups to develop globally competitive semiconductor products from India, rather than operating solely as captive design centers.

Whether these factors will yield a globally competitive product will become clearer in the coming months, as C2i begins validating its system-level power solutions with its first customers.