Teravolt looks to cannibalize older industries to meet AI power demand
Bitcoin farms, aluminum smelters, and other old infra is more lucrative to repurpose as a datacenter
The AI market is grappling with the challenge of meeting power demands to sustain its growth. US hyperscalers have accumulated over $220 billion in debt, and the two leading AI model makers have yet to prove profitability. Public opposition to datacenter development has also surfaced. The question remains: where will the world source the necessary electrical power?
Gartner predicts global datacenter power demand to reach 132 GW by 2026, 290 GW by 2030, and 410 GW by 2036, while Morgan Stanley expects US datacenter demand to surpass 74 GW by 2028, indicating a significant shortfall in available grid power. Building new grid infrastructure takes much longer, requiring five to 15 years for planning, permitting, and construction, compared to just one to three years for datacenters.
Teravolt, a London-based AI infrastructure company, recognizes this gap and proposes a solution by repurposing existing energy assets like old thermal power plants, industrial sites, or refineries. These retrofitting efforts have been ongoing for Bitcoin mining operations, with AI tokens proving more profitable than intermittently minted crypto tokens.
Industries like aluminum smelting also present opportunities, with AI datacenters generating significantly higher revenue and EBITDA compared to traditional power generation.
Laert Karaashev, co-founder and managing partner of Teravolt, expects most AI stack components to become commoditized, but the power aspect remains a challenge. The company aims to cannibalize existing industries to bridge the power gap while AI workloads remain highly valuable. Denis Alkhazov, founder and general manager, emphasizes the substantial margin extracted from AI power consumption compared to conventional industries, and predicts AI services will become economically self-sustaining later this year.
Teravolt is currently focusing on Eastern and Southern Europe due to favorable brownfield sites and shorter customer timelines, while Western Europe and the US present challenges due to higher costs and longer implementation periods.
Written by urgent.news from The Register's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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