Alphabet spin-off SIP launches Verrus, a data center concept built around battery ‘microgrids’

Sidewalk Infrastructure Partners — the Alphabet spinout that focuses on building and backing new approaches to complicated infrastructure problems in areas like power, broadband and waste management — has launched its latest project, a new concept for more flexible data center energy management called Verrus.

Verrus incorporates “microgrids” based on advanced, high-power batteries with software to understand and allocate energy to specific tasks and applications, and it is designed to address some of power challenges posed by modern computing needs. These include  peaks of cloud computing usage and larger projects — such as AI training — that could be bundled into batches distributed across time frames where there is less demand.

Jonathan Winer, the co-founder and co-CEO of SIP, said that the first three data centers designed using Verrus’ architecture will be located in Arizona, California and Massachusetts.

The aim is to have these operational in 2026 or 2027. There are as of yet no signed customers, although Winer said that a number of “hyperscalers” — one of whom, Alphabet, remains a primary backer of SIP after spinning it out several years ago — have shown interest in the project for when it does come online and would likely become one of its target segments when seeking investment. (Alongside the new business, SIP is also launching the Data Center Flexibility Initiative to bring stakeholders like energy companies, tech giants and regulators together in the meantime.)

Winer described Verrus as having “gigawatt scale ambitions” A data center to meet that scale, he estimated, could cost $1 billion to put together, with hundreds of millions of dollars of equity needed to get it off the ground. That is only likely to come after building has started and customers begin to sign up, he said. In addition to Alphabet, others that back SIP currently include Ontario Teachers’ and StepStone.

Winer said that SIP has been developing the project in stealth mode for almost two years already, and that it was an offshoot of other research that it had been doing into electricity grid management, coupled with SIP’s work with companies focused on load shifting to better manage energy consumption. Observing the strain that data centers in particular have on the electrical grid, SIP turned its attention to those data centers themselves.

The explosion of cloud computing and AI data computations present “a real challenge on the grid,” he said, and typically data centers are at capacity. “In order to add what we’re going to need both of the AI challenge just general cloud compute there’s going to have to be a new approach to energy management,” he noted. Simply building more data centers, whether run by third-party data center operators or by the hyperscalers themselves, will not keep up with demand. 

Today, extra power comes from diesel generators and using redundant electrical systems within data centers themselves. Verrus’s proposal is to instead use what Winer refers to as a “micro grid” that will include a high-capacity battery, which will mean it will be more flexible to deploy power to specific areas or even projects within a data center.

In turn, this means that an AI training job, as one example, could effectively be paused and batched and run at a different time, versus, say, an enterprise cloud service that might require “five nines” demand response.

As SIP sees it, simply adding more data centers — which has been the approach up to now — is not a sustainable approach longer term.

“The challenge with adding data centres to the grid is not the 340 days a year that the grid isn’t maxed out. The grid is very happy to supply power on the days when it’s not at capacity,” he said. “The real challenge is the 20 days a year where for few hours a day they can’t serve the load.” A flexible energy management system would allow for what he described as “islands” in the data center during those hours.

The approach that Verrus proposes to take underscores how energy usage and consumption continue to evolve in the tech world, but also how energy continues to be a persistent, expensive, and ultimately resource-intensive issue that needs as much focus and innovation as the software and hardware that rely on it to evolve.

Verrus is not the only tech company that is eyeing up how to build and use super-capacity battery architecture to manage electricity distribution. Instagrid, a startup out of Germany, recently raised funding for its startup, building batteries to help users with power management in use cases where they are off the grid altogether.