Phaidra, an AI-based control system that helps mission-critical facilities like data centers improve energy efficiency and increase compute infrastructure, today announced $12 million in new funding led by Index Ventures, bringing their total capital raised to $60.5 million. This new funding will allow Phaidra to accelerate the expansion of its autonomous control systems, which use reinforcement learning to help data centers optimize their power usage while improving reliability. The announcement comes at a time when rapid AI innovation relies on scaling compute. This, combined with a shortage of power and skilled labor needed to support mission-critical facilities like data centers, is contributing to a global crisis where AI innovation is constrained by a lack of compute infrastructure.
Industry Challenges
- Growing Demand and Energy Consumption
- The data center industry, the backbone of AI, is growing rapidly. In the US, which accounts for 40% of the global data center market, demand is forecast to reach 35GW by 2030, up from 17GW in 2022. However, data centers are extremely energy-intensive, consuming 10-50 times the energy per floor space of a typical commercial office building.
- Power Shortages
- Existing markets are struggling to meet demand. In Northern Virginia, the world’s largest data center market, only 0.2% of grid capacity is available. In Ireland, data centers are projected to account for 32% of national electricity consumption by 2026. There is simply not enough excess power available in the world to support AI’s current growth trajectory without major improvements in data center infrastructure and efficiency.
Phaidra’s AI Control Platform
- Autonomous Learning and Efficiency
- Phaidra’s AI control platform turns industrial facilities into intelligent, self-learning systems that combine the precision of manual methods with the scalability and efficiency offered by AI. It seamlessly integrates into existing building management systems to capture real-time data, feed that data into its cloud-based reinforcement learning agent, and autonomously alter the settings on the individual components to achieve optimal performance of the entire system.
- Continuous Improvement
- Unlike traditional control systems, which slowly degrade and require regular manual programming updates, Phaidra automatically learns and gets better over time. Phaidra’s early customers have seen efficiency improvements amounting to millions of dollars in cost savings, which translates to increased power availability for revenue-generating services.
Founding Team and Vision
- Expert Leadership
- Phaidra’s founding team brings a rare mix of specific engineering know-how and world-class AI research credentials. While working as a data center operator at Google, co-founder and CEO Jim Gao was inspired by the AlphaGo documentary to explore how machine-learning technology could be applied to improve efficiency in Google’s data centers. His enthusiasm caught the attention of Phaidra’s now-CTO Vedavyas Panneershelvam, who had worked as a primary research engineer on AlphaGo.
- Formation and Development
- They joined forces at DeepMind, where they developed AI-powered solutions that reduced the amount of energy needed to cool Google’s data centers by 30%. After publishing their findings, Gao and Panneershelvam were approached by industrial control systems engineer Katie Hoffman, who was leading innovation projects at Trane Technologies and later joined as Phaidra’s third co-founder and COO.
Future Prospects
- Expansion Plans
- Today, Phaidra’s team of about 100 includes top software engineers and researchers from Google, DeepMind, Meta, and Amazon, along with specialists from leading engineering firms like Trane and Johnson Controls. The new funding will support continued investment in research and development, implementation, and customer success, along with expanded go-to-market efforts as Phaidra continues its mission of helping data centers worldwide optimize their energy usage.
- Industry Impact
- “For as much as we talk about AI and growing compute capacity, we are ignoring the heart of the problem—power,” says Martin Mignot, Partner at Index Ventures. “There is no AI without sufficient energy. The more time we spent researching this problem, the more clearly we saw the importance of investing in solutions that address the downstream effects of computational growth. Phaidra is a perfect example of the right team with the right product in the right place, at a unique moment in time.”
- Customer Success
- “When you meet the team and talk to their customers, it’s clear that Phaidra is in a unique position to tackle this problem head-on,” says Mignot. “No other startup has the domain expertise and AI research chops to actually deliver on the promise of autonomous controls, to say nothing of the impressive performance and results they’ve already shown. We’re excited to see Phaidra take the next step as a company and deliver solutions that are not only critical to data centers’ growth and sustainability but to the overall growth and sustainability of AI development, the technology industry, and the world at large.”
Phaidra’s innovative AI-based control systems are set to revolutionize the data center industry by optimizing energy efficiency and enhancing compute infrastructure. With $12 million in new funding, Phaidra is well-positioned to accelerate the deployment of its solutions, ensuring that data centers can meet the growing demands of AI while minimizing energy consumption and costs.