Peter Thiel backs $1bn ocean data centre start-up powered by waves
Originally published in FT: https://www.ft.com/content/711ce313-16fb-4a12-b6be-fbed547c8a39?syn-25a6b1a6=1
US tech billionaire leads $140mn investment into Panthalassa as search for AI power pushes into exotic new frontiers.
Peter Thiel is leading a $140mn investment in a US start-up that plans to use wave energy to fuel giant fleets of floating data centres, as Silicon Valley’s search for AI power pushes into exotic new frontiers. Panthalassa, which has spent a decade developing its ocean energy technology, uses the bobbing motion of waves to force water through a turbine to produce electricity and power AI chips. Garth Sheldon-Coulson, co-founder and chief executive, told the FT the new money would allow the company to scale up a pilot manufacturing facility, with the aim of starting commercial deployments next year.
The deal values Panthalassa at close to $1bn, including the new capital, according to a person familiar with the terms. Thiel, a co-founder of Palantir and PayPal, said: “The future demands more compute than we can imagine. Extraterrestrial solutions are no longer science fiction. Panthalassa has opened the ocean frontier.” The company’s “nodes” stand almost as tall as Big Ben in London or New York’s Flatiron Building. Most of the 85-metre-long solid-steel structure sits below the surface, including a hermetically sealed container holding the AI server, cooled by seawater. The vessels can drive themselves to their destination, using the shape of their hull to propel themselves through the waves without an engine.
As demand for AI computing capacity continues to outstrip supply, a growing number of long-shot efforts to ease the energy bottleneck are receiving funding, from rebooting mothballed nuclear power stations to launching solar-powered data centres into space. Sheldon-Coulson, who was previously an AI and energy researcher at hedge fund Bridgewater, believes wave and wind power are — alongside solar and nuclear — the only clean sources capable of generating “tens of terawatts” of energy. “Energy from open-ocean waves is low-cost, sustainable, abundant and now we have the technology to make it accessible for people,” he said. Thiel has previously championed and invested in “seasteading”, a libertarian project to launch seaborne communities in international waters, beyond the jurisdiction of any sovereign state. He is investing in Panthalassa through his personal fund. The VC firm he co-founded, Founders Fund, backed the company in a previous financing in 2018.
Other new investors in this round include Salesforce.com chief executive Marc Benioff; PayPal and Affirm co-founder Max Levchin; and John Doerr, an early investor in Google, Amazon, Uber and Netscape, who hailed Panthalassa as a “game changer in addressing global energy needs and clean power generation”. Panthalassa is staffed by former engineers from the likes of SpaceX, Boeing, Nasa, Tesla and Apple. Co-founder Brian Moffat previously worked at Disney’s Imagineering unit and Google, while Dan Place, engineering director, worked on the “drone ship” SpaceX used to catch its reusable rockets.
The system’s AI chips receive and respond to users’ queries via SpaceX’s Starlink satellite connection. Sheldon-Coulson said Panthalassa’s lollipop-shaped system can eventually produce much more energy than tidal or wind energy because it operates in remote areas and does not need to be tethered to the ocean floor or mainland. “One of the key insights that we had . . . was that it’s very important to use the electricity in place,” he said. “We will never be transmitting electricity back to shore. That makes us very different from all other ocean energy that’s been tried in the past.” Panthalassa’s nodes are largely solid, with no hinges, flaps or gearboxes that might break down in hostile ocean conditions. It also makes it easier to manufacture at scale. The Oregon-based start-up plans to build its pilot manufacturing facility in the US but could move elsewhere depending on where it deploys larger fleets.
Its system is “extremely rapid to manufacture” and uses only “earth-abundant materials” such as steel, Sheldon-Coulson said. “The supply chains are extremely robust for this particular energy technology. We think that’s really important for scalability and environmental and ecological reasons.” Panthalassa’s nodes will first be towed out to sea horizontally behind a boat before flipping into a vertical position and travelling out into the open ocean by themselves. The company has not disclosed where it plans to deploy its fleet but it would be somewhere with the right wave conditions and remote enough to avoid shipping routes.
The nodes, which recirculate the same water inside to power the generator, have no emissions or engines, minimising impact on sea life. “In our target regions . . . the waves are created by the wind and the wind is created by heat from the sun,” Sheldon-Coulson said. “So waves are twice-concentrated sunlight and they keep going even when the wind stops. The waves are like a battery for sunlight and we can be capturing from it 24/7.