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TL;DR
Two October deals highlight how AI data-center growth is shifting attention from chips to electricity infrastructure: Vantage reserved more than 1 gigawatt of solid-state transformer factory capacity, and NiSource agreed to supply Microsoft with about 1,100 megawatts of generation and a 600-megawatt battery. The deals point to rising interest in direct-current power systems and storage, but vendor efficiency claims and the effects on household bills remain uncertain.
Two power deals announced in October show how the growth of artificial intelligence data centers is driving investment in electricity infrastructure: Vantage reserved more than 1 gigawatt of factory capacity for solid-state transformers, and NiSource signed a 20-year agreement with Microsoft involving about 1,100 megawatts of generation and a 600-megawatt battery. The agreements come as operators explore higher-voltage direct-current systems to serve increasingly power-hungry AI racks.
Vantage reserved the manufacturing capacity on October 21 for a solid-state transformer from Heron Power. The equipment is designed to convert grid electricity directly into 800-volt direct current, and the product includes energy storage intended to buffer changes in data-center demand. The reservation is a commitment to factory capacity; the source material does not say that more than 1 gigawatt of equipment has already been delivered or installed.
On October 16, Indiana utility NiSource signed a 20-year power deal with Microsoft. The agreement adds about 1,100 megawatts of generation and includes a 600-megawatt battery. The reported figures describe the planned resources associated with the agreement; the material does not specify their construction schedule, operating arrangements or how costs will be allocated.
The deals arrive amid a shift in data-center design. The International Energy Agency says AI-server power density rose 11-fold from 2020 to 2025 and is expected to quadruple again by 2027. NVIDIA says its planned 800-volt design could reduce copper use by 45% compared with 415-volt AC distribution and improve end-to-end efficiency by up to 5% against current 54-volt systems. Those are company engineering claims, not independent measurements, and full-scale production is planned with its Kyber systems in 2027.
Infographic 01 · From grid to rack
AI racks near a megawatt are outgrowing the AC power chain.
Why the industry is moving to 800-volt direct current: fewer conversions, less copper, batteries on the main path. The numbers are vendor figures with different baselines, so they cannot be added up.
Today: many conversions
Typical AC chain from the grid to the rack
- Medium-voltage AC from the grid
- Transformer steps it down to low-voltage AC
- UPS converts to DC for the batteries and back to AC
- Distribution units feed the racks
- Every server power supply converts AC to DC again
Each stage loses energy, and almost all of the loss becomes heat the cooling system must remove.
800 V DC: convert once, outside
NVIDIA reference design, full-scale production planned with Kyber racks in 2027
- 13.8 kV AC from the grid
- Converted once to 800 V DC at the edge of the site, batteries on the same DC bus
- 800 V DC busway to the racks
- Stepped down inside the rack, for 1 MW racks and beyond
Bridge for existing halls: a “sidecar” cabinet next to the rack converts AC to 800 V DC, while the old chain stays in place.
Power lost per MW delivered to the rack
kW, SMA white-paper model vendor model
What NVIDIA says 800 V DC changes
NVIDIA’s engineering claims claim
Sources: NVIDIA technical blog (20 May 2025, updated 31 Jul 2025); SMA America, sponsored content in Utility Dive (26 Oct 2026). Rack density: IEA, Key Questions on Energy and AI (Apr 2026) (AI server power density 11× from 2020 to 2025, a further 4× by 2027).
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Power Infrastructure Moves Upstream
The developments matter because access to electricity equipment and grid capacity can constrain data-center expansion as much as access to computing hardware. The IEA estimates global data-center electricity use will rise from 485 terawatt-hours in 2025 to 950 terawatt-hours in 2030, roughly 3% of world demand. It also says transformers can take two to three years to arrive and grid connections can take five to ten years in many places.
Direct-current distribution and batteries could help operators manage dense computing loads and reduce some conversion losses, but they do not create new electricity or remove the need for grid connections. Their effects on bills will depend on where new plants and wires are built, how projects are financed, and whether data-center operators or other customers pay the associated costs. The source material does not establish how the NiSource-Microsoft agreement will affect residential rates.
The strain is not evenly distributed. Berkeley Lab data cited in the source says US data centers used 4.4% of national electricity in 2023 and could account for 6.7% to 12% by 2028. The US average household electricity price is reported at 18.21 cents per kilowatt-hour this year, compared with 17.30 cents in 2025; those figures alone do not show that data centers caused the change.
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From AC Server Rooms to 800-Volt DC
Conventional data centers receive alternating current, step it down through transformers and power systems, then convert it to low-voltage direct current inside servers. Each conversion loses some energy, much of which becomes heat that cooling systems must remove. Designs built for racks drawing tens of kilowatts face different demands as AI racks approach much higher power levels.
NVIDIA’s technical material describes a proposed alternative: convert 13.8-kilovolt grid power to 800-volt DC near the facility perimeter and distribute DC to high-power racks. The company says a 1-megawatt rack supplied at 54 volts could require up to 200 kilograms of copper busbar. A Utility Dive article published October 26 describes an intermediate “sidecar” approach, using a conversion cabinet beside a rack so newer DC equipment can operate in halls designed around AC. The article is sponsored content by inverter maker SMA America, and its modeled loss figures should be read as vendor analysis rather than independent test results.
Storage is part of the same design discussion because AI workloads can produce rapid changes in electricity demand. The IEA says 20–25 gigawatts of batteries could be installed in data centers by 2030 and says they could become a grid asset if incentives are suitable. That is a forecast, not a confirmed deployment total.
“Up to 5% better end-to-end efficiency”
— NVIDIA, in its 800 VDC technical material
Costs, Delivery and Grid Effects
The reported agreements do not establish when the transformer capacity or new generation and battery resources will enter service. The source material also does not provide the financial terms of the NiSource-Microsoft contract, explain who will pay for supporting grid upgrades, or describe how the battery will be dispatched.
Technical benefits remain partly prospective. NVIDIA’s copper, efficiency and maintenance estimates are vendor claims, while SMA’s power-loss comparison is based on a vendor model. Independent operating data on large-scale 800-volt DC deployments is not provided. It is also unclear how quickly existing data centers can adopt DC equipment, whether through new construction or retrofit systems such as sidecars.
More broadly, estimates of data-center electricity use and the amount of battery capacity that may be installed are forecasts. The cited electricity-price figures do not isolate the effect of data-center demand, and the material does not show how the costs of generation and transmission will be divided among companies and households.
Track Construction and Deployment
The next test is whether reservations and contracts become operating infrastructure. Relevant milestones include factory delivery of Heron Power’s transformers, development of the generation and battery resources associated with the NiSource-Microsoft agreement, and NVIDIA’s planned Kyber production in 2027. The source material does not provide firm completion dates for the first two projects.
Operators, utilities and regulators will also have to determine how storage connects to the grid, how projects are paid for and what protections apply to other electricity customers. Future deployment data and independent performance measurements will help establish whether 800-volt DC systems deliver the efficiency and material savings vendors predict.
Key Questions
What did Vantage reserve?
Vantage reserved more than 1 gigawatt of factory capacity for Heron Power solid-state transformers designed to convert grid electricity to 800-volt DC. The report does not say the equipment has already been delivered or installed.
What is included in the NiSource-Microsoft agreement?
The 20-year agreement includes about 1,100 megawatts of generation and a 600-megawatt battery. The source does not provide a construction schedule or explain the agreement’s cost allocation.
Why are data centers considering 800-volt DC power?
Higher-voltage DC distribution is intended to serve high-power AI racks while reducing the amount of copper and the number of power conversions. Specific savings cited by NVIDIA are company estimates, not independently confirmed operating results.
Will these projects raise household electricity bills?
The material does not establish whether the projects will change household bills. The effect would depend on project costs, grid upgrades, electricity-market conditions and how costs are assigned; the reported price figures do not identify data centers as their cause.
Source: ThorstenMeyerAI.com
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