The world’s AI boom is colliding with a massive energy crunch — and VEIR superconductors for data centers may be the breakthrough solution everyone’s been waiting for.

As artificial intelligence models grow more advanced, the power required to run massive data centers has exploded. What used to be a manageable tens of kilowatts per rack has surged to more than 200 kilowatts, with projections hitting 600 kilowatts to 1 megawatt in just a few years.

That exponential growth has data center developers scrambling for new ways to manage heat, space, and energy — a challenge VEIR, a Massachusetts-based startup backed by Microsoft, is determined to solve.

The Power Problem That Sparked VEIR’s Innovation

“In the next couple of years, it’s going to be 600 kilowatts, and then we’re going to a megawatt,” said Tim Heidel, CEO of VEIR. “We’re talking to companies who are now trying to design data centers capable of supporting multi-megawatt racks.”

The problem? Traditional copper cables — which carry electricity to server racks — are hitting their physical limits. They take up too much space, generate heat, and waste energy through resistance.

That’s where VEIR superconductors for data centers come in. These specialized cables can transmit enormous amounts of electricity with zero energy loss, allowing data centers to handle AI-scale power demands without overheating or requiring massive cooling infrastructure.

How VEIR Superconductors for Data Centers Work

Superconductors are materials that conduct electricity perfectly — but only at extremely low temperatures. VEIR cools its superconducting cables using liquid nitrogen, maintaining temperatures around –196°C (–321°F).

Each cable is enclosed in a sealed jacket that carries the coolant and protects the system. At the endpoints, termination boxes convert the superconducting current into standard copper for safe integration into data center systems.

Heidel explained it simply:

“We’re not just making cables. We’re building complete systems — cooling, manufacturing, and power integration — that let companies deliver massive amounts of energy efficiently in small spaces.”

According to the company, VEIR superconductors for data centers use 20 times less space than copper and can carry power five times farther, a leap that could completely change how future data centers are designed.

From Grid Lines to Data Racks

VEIR originally focused on long-distance power transmission, hoping to boost capacity for national grids. But large utilities are known for their cautious pace in adopting new technologies. Meanwhile, the AI data center industry was moving at lightning speed.

“The AI and data center community is desperate for solutions today,” Heidel said. “The pace of innovation and competition in this space is unlike anything we’ve seen in the power industry.”

So VEIR pivoted. The startup took its proven high-voltage transmission technology and repurposed it for low-voltage, high-demand environments like data centers.

The company even built a simulated data center near its Massachusetts headquarters to test its systems in realistic conditions. Pilot installations are planned for 2026, with a commercial launch slated for 2027.

Microsoft’s Investment and the Bigger AI Picture

Microsoft’s backing underscores just how urgent this issue has become. AI workloads, from large language models like GPT-5 to cloud-based generative applications, are driving unprecedented power consumption across hyperscale data centers.

By investing in VEIR superconductors for data centers, Microsoft hopes to make its next generation of cloud infrastructure more energy-efficient and sustainable.

The cables could eventually become the backbone of AI-ready power delivery systems, helping tech giants handle ever-larger compute clusters while minimizing environmental impact.

Why It Matters

Data centers already account for an estimated 2% of global electricity use, and that figure is rising fast. The AI boom is accelerating that demand — and without innovation, the energy infrastructure behind the internet could soon hit a wall.

VEIR’s approach, if successful, could enable data centers to deliver exponentially more power without the waste or heat traditional systems generate.

“We’re making it possible to transmit megawatts of power safely and efficiently in confined spaces,” Heidel said. “That’s critical for AI’s future.”

For the AI industry, VEIR superconductors for data centers could mark the beginning of a new era — one where advanced computing scales sustainably without burning through energy resources.