Grid software unicorn Emerald AI has formed a coalition with Google and Nvidia that will use the startup’s technology to secure space on the grid for more data centers.

The AI Energy Management Alliance (AEMA) hopes to make demand response — a paradigm in which data centers temporarily reduce their electricity use — an integral part of data center development. Pausing noncritical tasks and shifting some compute loads, AEMA says, could allow an additional 100 gigawatts of data centers to connect to the grid.

The founding trio is joined by Anthropic, and a range of utilities including AES, Constellation, National Grid, and NRG Energy.

Demand response is an old concept that has been used by utilities for decades. It works because the grid is designed with peak loads in mind. For much of the year, demand is well below the maximum the grid can support.

Traditionally, demand response covered large electricity users like factories, which in times of high demand would agree to reduce their usage, typically by pausing production or switching to backup generators. In exchange, the utility would pay them for the service, often handsomely.

Today, data centers can also take advantage of those programs, usually by turning on backup generators. 

Emerald AI has been proposing an alternative to dirty diesel generators. The company’s software coordinates requests from utilities with data centers, which can pause noncritical tasks or shift loads to other data centers where the grid has some headroom. 

The startup isn’t the only one working on such technology. Google has been developing its own tools, and Enel X lets data centers tap their uninterruptible power supplies to round off peaks in power demand. Limiting max grid usage to 90% for a few hours at a time could let data centers free up 76 gigawatts of capacity, according to a study by Goldman Sachs published last year.

Emerald AI does have an advantage, though. Its software connects utilities directly to data centers, which should allow data centers to respond quickly to requests, much like batteries. The startup also recently raised $150 million in a Series A led by Energize Capital and DCVC, giving it the sort of funding needed to roll out the technology on a wider scale. 

Given the peaky nature of AI compute loads, and data centers’ ability to quickly ramp up and down, the creation of something like AEMA is overdue. The coalition also promises to help tech companies and utilities find new sites for data centers, an effort that hasn’t been easy for either party.

Despite its promise, more sophisticated demand response won’t solve all of the grid’s problems today. Ayse Coskun, Emerald AI’s chief scientist, told TechCrunch that her company’s technology promises to blunt the industry’s need for new generating sources, but it won’t eliminate it entirely.

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Tim De Chant

Tim De Chant is a senior climate reporter at TechCrunch. He has written for a wide range of publications, including Wired magazine, the Chicago Tribune, Ars Technica, The Wire China, and NOVA Next, where he was founding editor.

De Chant is also a lecturer in MIT’s Graduate Program in Science Writing, and he was awarded a Knight Science Journalism Fellowship at MIT in 2018, during which time he studied climate technologies and explored new business models for journalism. He received his PhD in environmental science, policy, and management from the University of California, Berkeley, and his BA degree in environmental studies, English, and biology from St. Olaf College.

You can contact or verify outreach from Tim by emailing [email protected].

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