NxtGen signs $27mn deal with Khosla-backed firm for energy-efficient data centres

Bengaluru-based NxtGen, a provider of cloud services, announced on Wednesday a contract valued at $27 million (Rs 225 crores) with Akash Systems, a U.S.-based provider of data centre cooling solutions. This partnership will help NxtGen enhance its sustainability efforts while delivering superior computational capabilities to its clientele.

In an interaction with TechCircle, A S Rajgopal CEO & MD, of NxtGen, said, “These servers will support NxtGen's goal of delivering energy-efficient and cost-effective AI compute services to enterprises of all sizes in India.”
NxtGen supports more than 900 enterprises across India alone, including small, midsized, and large organizations in both the private and public sectors.

Headquartered in California, Akash Systems, backed by Peter Thiel and Vinod Khosla, will supply its advanced Diamond Cooled servers to NxtGen's facilities across India. This collaboration aims to position NxtGen as one of the world's most energy-efficient AI compute solutions provider by utilizing NVIDIA and AMD GPUs cooled with Akash's Diamond Cooling technology. 

Akash's technology, which uses diamonds to transfer heat five times better than copper, involves synthetic diamond sheets that quickly conduct heat to a cold plate with a waterless dielectric fluid. This design reduces the number of high-speed fans needed, lowering overall power consumption and allowing for more compact server configurations, improving space efficiency by 20% and cutting power consumption by 40%.

That said, NxtGen is implementing a combination of waterless liquid cooling systems with diamond heat spreaders from Akash, achieving a PUE of 1.151, meaning only 0.15KW is needed for cooling per 1KW of server consumption, resulting in 40% power savings, Felix Ejeckam, CEO and co-founder of Akash Systems, said, adding that this announcement follows Akash Systems' recent approval for up to $68 million in funding under the CHIPS and Science Act by the U.S. Department of Commerce.

According to Rajgopal, India’s data centre sector faces high power consumption, which escalates with the deployment of AI infrastructure. “Continuous power demands cannot be met by renewable sources like solar and wind, prompting the need for sustainable AI solutions that minimise cooling power waste. This partnership aims to innovate energy-saving technologies, ultimately reducing operational costs and benefiting customers,” he said.

Keeping in mind these challenges, NxtGen plans to offer competitive pricing, with rates for GPU services significantly lower than the market average, aiming for a 50% reduction in AI service costs.

Rajgopal also added that the Indian government's AI initiatives, particularly through the INDIAai organization, support companies like NxtGen in growth and expansion. By focusing on sustainability and local production, these initiatives will create opportunities for AI service providers, he said.

Looking ahead to 2025, Rajgopal said, India is poised to become a significant market for AI applications, necessitating substantial data centre capacity. However, many existing facilities will need retrofitting to meet AI requirements, while new designs must be tailored for AI infrastructure.