Rocket Science Meets Baseload Power: Solving Data Center Energy Consumption with Modular Turbines

The Growing Crisis of Data Center Energy Consumption

The data center industry is facing a geometric power problem driven by rapidly increasing data center energy consumption. As AI infrastructure continues to scale, rack densities are reaching unprecedented levels, pushing energy demand far beyond what traditional systems were designed to handle.

At the same time, the existing utility model is struggling to keep up. Grid interconnection timelines can stretch from five to seven years, and deploying large-scale turbine infrastructure is slow, capital-intensive, and inflexible. This mismatch is creating a critical bottleneck. AI is advancing faster than the energy systems required to support it.

A new generation of companies is stepping in to solve this problem. Among them is Arbor, a West Coast startup led by former SpaceX engineers, taking an unconventional approach: applying rocket engineering principles to terrestrial power generation.

A New Approach to Data Center Energy Consumption

Arbor’s core innovation is the HALCYON turbine, a 25 MW modular unit built around oxy-combustion and a closed-loop supercritical CO2 (sCO2) power cycle. As data center energy consumption continues to rise, solutions like this are gaining attention for their ability to deliver high-density, reliable power without depending on long grid connection timelines.

Unlike traditional gas turbines, which burn fuel with ambient air and produce diluted exhaust streams, Arbor’s system uses pure oxygen. This creates a working fluid of supercritical CO2, a state in which CO2 behaves like both a liquid and a gas.

This shift changes everything about how the system performs.

Why This Technology Stands Out

Extreme Energy Density

Supercritical CO2 is significantly denser than steam, which allows the turbomachinery to be dramatically smaller. A system capable of generating 25 MW can be reduced to something closer in size to a large automotive engine rather than a locomotive-scale turbine. As data center energy consumption increases, this level of compact power becomes a major advantage, especially in environments where space and deployment speed are critical.

Simplified Carbon Capture

Because the system uses oxy-combustion, the exhaust stream is composed almost entirely of CO2 and water vapor. This eliminates the need for traditional carbon capture methods like amine scrubbers, which are energy-intensive and costly. Instead, the CO2 can be cooled, separated, and compressed directly for sequestration.

Higher Efficiency Potential

The system is designed to operate at extremely high temperatures, potentially exceeding 1000°C. This increases thermodynamic efficiency but requires advanced materials capable of handling extreme conditions.

Material Science Meets Manufacturing Innovation

To operate in such a demanding environment, Arbor uses additive manufacturing to produce turbine components from nickel-based superalloys. Rather than assembling thousands of individual parts, large sections of the turbine are printed as single, monolithic units.

This enables:

• Complex internal cooling channels that cannot be produced through traditional manufacturing

• Faster iteration cycles without relying on long supply chains

• Fewer mechanical failure points due to reduced seams and joints

This approach mirrors techniques used in advanced aerospace systems, bringing a new level of performance and efficiency to energy infrastructure.

Scaling Solutions for Rising Data Center Energy Consumption

Arbor has partnered with GridMarket to deploy 5 gigawatts of modular baseload power for data centers beginning in 2029. This modular strategy is designed to reduce construction timelines and simplify deployment compared to traditional large-scale plants. It also aligns with the growing need to respond quickly to rising data center energy consumption driven by AI expansion.

Rather than waiting years for grid upgrades, operators could deploy power closer to where it is needed, when it is needed.

The Economics Behind the Model

A key driver behind this approach is the Section 45Q tax credit, which provides financial incentives for carbon capture and sequestration.

Under current policy:

• Projects can receive up to $85 per metric ton of CO2 permanently stored

• Qualification thresholds have been lowered, making modular systems eligible

• Credits can be received as direct payments or transferred for immediate liquidity

This creates a financial framework that supports the deployment of cleaner, modular power systems while improving project economics.

Leadership and Industry Backing

Arbor’s leadership team brings experience from both aerospace and carbon removal sectors.

• Brad Hartwig, CEO and co-founder, previously worked on engine components at SpaceX

• Andres Garcia-Clark, CTO and co-founder, specialized in advanced turbomachinery

• Nishad Pai, Chief Commercial Officer, joined from carbon removal company Heirloom

The company has raised approximately $55 million in funding, backed by investors including Lowercarbon Capital, Valor Equity Partners, and Founders Fund. They have also secured a carbon removal agreement with the Frontier Coalition, which includes companies such as Stripe, Alphabet, and Meta.

What This Means for the Future of Data Center Energy Consumption

Arbor represents a convergence of aerospace engineering and energy infrastructure at a time when both are under pressure to evolve.

As data center energy consumption continues to rise alongside AI development, traditional energy systems may no longer be sufficient on their own.

Modular, high-density, and rapidly deployable power solutions offer a new path forward. One that is faster, more flexible, and potentially cleaner than legacy approaches.

The real question is no longer whether energy innovation is needed, but how quickly it can scale to meet demand.