The rapid expansion of artificial intelligence is placing unprecedented strain on global power grids, prompting a search for innovative solutions to meet the surging energy demands of data centers. Traditional electricity transmission infrastructure is struggling to keep pace, with losses averaging around 5 percent in the U.S. And significantly higher rates elsewhere, according to the U.S. Energy Information Administration (EIA). Now, hyperscale cloud providers like Amazon Web Services, Google Cloud, and Microsoft Azure are exploring advanced technologies, including high-temperature superconductors (HTS), to boost efficiency and secure reliable power supplies for their growing operations.
Microsoft is leading the charge, highlighting the potential of HTS to revolutionize power delivery. The company argues that these materials can dramatically reduce energy waste, enhance grid resilience, and minimize the physical footprint of power infrastructure supporting data centers. “Because superconductors take up less space to move large amounts of power, they could help us build cleaner, more compact systems,” wrote Alastair Speirs, general manager of global infrastructure at Microsoft, in a recent blog post. This pursuit comes as overall U.S. Electricity demand is projected to increase by 15-20% in the next decade, driven by AI and other factors, according to the Department of Energy.
Unlike conventional copper wiring, which encounters resistance and generates heat during electricity transmission, HTS materials exhibit almost no electrical resistance when cooled to cryogenic temperatures. Even as still requiring significant cooling, these “high-temperature” superconductors operate at warmer temperatures than their predecessors, making them more practical for widespread deployment. This translates to smaller, lighter cables that deliver more power with minimal voltage drop and heat generation – a critical advantage for densely packed AI data centers.
According to Speirs, next-generation superconducting transmission lines could deliver capacity an order of magnitude higher than conventional lines at the same voltage level. Microsoft is actively investing in this technology, including a $75 million investment in Veir, a developer specializing in superconducting power technology. Veir’s conductors utilize HTS tape composed of rare-earth barium copper oxide (REBCO), a ceramic superconducting material deposited on a metal substrate.
“The key distinction from copper or aluminum is that, at operating temperature, the superconducting layer carries current with almost no electrical resistance, enabling very high current density in a much more compact form factor,” explained Tim Heidel, CEO and co-founder of Veir. Maintaining the necessary cryogenic temperatures requires a cooling system, and Veir employs a closed-loop liquid nitrogen system. “Liquid nitrogen is a plentiful, low cost, safe material used in numerous critical commercial and industrial applications at enormous scale,” Heidel added, emphasizing the company’s focus on leveraging existing industrial standards for safe and reliable operation.
Cooling Challenges and Cost Considerations
Veir favors external cooling systems to minimize the footprint and complexity within the data center itself, feeding liquid nitrogen lines directly into the facility. While the use of rare earth materials and cryogenic cooling adds to the initial cost, Heidel argues that HTS becomes economically viable in scenarios where power delivery is constrained by space, weight, voltage drop, or heat. “In those cases, the value shows up at the system level: smaller footprints, reduced resistive losses, and more flexibility in how you route power,” he said.
The increasing demand from AI data centers is creating a unique proving ground for HTS technology. Hyperscalers are willing to invest in higher-efficiency systems, balancing development costs against the potential revenue generated by AI services. “HTS manufacturing has matured—particularly on the tape side—which improves cost and supply availability,” noted Husam Alissa, Microsoft’s director of systems technology. “Our focus currently is on validating and derisking this technology with our partners with focus on systems design and integration.”
The International Energy Agency (IEA) estimates that electricity use from data centers could more than double by 2030, with AI-optimized facilities quadrupling their consumption. This surge in demand is prompting utilities to rethink grid planning and modernization strategies, as highlighted by EPE Consulting. The ability to accurately forecast and manage the volatile power needs of AI data centers will be crucial for maintaining grid reliability.
While HTS offers a promising path toward more efficient power delivery, it’s not a universal solution. The economics are most compelling in specific, high-demand scenarios. As manufacturing scales and standardization improves, costs are expected to decrease, potentially broadening the applicability of this technology. For now, AI data centers represent an ideal testing ground for HTS, driving innovation and paving the way for a more sustainable and resilient power infrastructure.
The development and deployment of HTS technology are still in their early stages, and further research and investment will be necessary to fully realize its potential. The coming years will be critical in determining whether HTS can grow a mainstream solution for powering the next generation of data centers and supporting the continued growth of artificial intelligence.
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