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TL;DR
Data center operators are exploring 800-volt direct-current systems and larger battery installations as AI racks demand more power and grid connections take years in many areas. Vantage reserved more than a gigawatt of factory capacity for Heron Power solid-state transformers, while a separate NiSource-Microsoft agreement includes new generation and a 600-megawatt battery. Efficiency and cost figures cited for the technology are largely vendor claims, and the pace and scale of adoption remain uncertain.
Data center power planning is moving beyond chips: Vantage reserved more than a gigawatt of factory capacity for Heron Power solid-state transformers that convert grid electricity directly to 800-volt direct current, according to an October 27 report by ThorstenMeyerAI.com. The move comes alongside a separate Microsoft-NiSource power agreement that adds about 1,100 megawatts of generation and a 600-megawatt battery, as operators seek ways to serve energy-intensive AI facilities.
The two agreements point to related but distinct parts of the power challenge. Vantage’s reservation, dated October 21, is for factory capacity for Heron equipment; the available information does not say that the full capacity has been installed or that a particular data center has begun operating on it. Heron’s solid-state transformer is designed to deliver 800-volt DC power and include storage to help manage changes in demand.
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, according to the source report. It is a separate project from Vantage’s equipment reservation; the two should not be treated as one combined deployment.
The technical case for 800-volt DC is that it could reduce the number of conversion steps between grid power and servers, while higher voltage can carry more power through conductors of a given size. NVIDIA’s reference design describes converting 13.8-kilovolt grid power to 800-volt DC near a facility and distributing it to racks, with full-scale production planned for its Kyber systems in 2027. NVIDIA claims 45% less copper than 415-volt AC distribution and up to 5% better end-to-end efficiency than current 54-volt systems. These are vendor estimates, not independently verified results.
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 Is Becoming a Data Center Bottleneck
The shift matters because AI servers are concentrating more demand into each rack. The International Energy Agency says AI server power density rose 11-fold from 2020 to 2025 and is projected to quadruple again by 2027. At those levels, the traditional sequence of transformers, uninterruptible power supplies and distribution equipment can take up space, lose energy as heat and require substantial cabling.
Electricity access may constrain expansion even when operators can obtain chips and build facilities. The IEA estimates that transformers can take two to three years to arrive and grid connections can take five to ten years in many places. A more efficient on-site power design could help operators use available capacity, but it cannot by itself create new grid supply or resolve delays in permitting and connection.
Batteries could serve both as backup and as a way to buffer rapid fluctuations in computing demand. The IEA projects 20–25 gigawatts of batteries could be installed at data centers by 2030. That is a forecast, not a confirmed build-out, and the agency says their role as a grid asset depends on suitable incentives. For electricity customers, the implications will depend on how new generation, wires and storage are financed and how costs are allocated locally.
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From AC Conversion to DC Distribution
Most data centers receive alternating current from the grid, then step it down and convert it several times before servers use low-voltage direct current. Each conversion loses some energy, much of which becomes heat that cooling systems must remove. That design has served lower-density computing, but megawatt-scale racks increase the amount of equipment and copper needed to deliver power.
NVIDIA says a 1-megawatt rack supplied at 54 volts could require up to 200 kilograms of copper busbar and that its power shelves could occupy as many as 64 rack units in a future design. Those figures are company engineering estimates. Another possible route is a “sidecar” conversion cabinet beside a rack, allowing newer DC racks to operate in existing halls while much of the AC infrastructure remains in place.
A Utility Dive article published October 26 makes the case for DC distribution, but the source report identifies it as sponsored content by inverter maker SMA America. SMA’s model estimates that delivering 1 megawatt through a conventional AC chain loses about 80 kilowatts, compared with about 20 kilowatts when converting to 800-volt DC outside the building. The modeled figures are not independent measurements of operating facilities.
“The company says the system could use 45% less copper and deliver up to 5% better end-to-end efficiency than current 54-volt systems.”
— NVIDIA, describing its 800-volt design
Deployment Scale and Costs Remain Open
The factory reservation does not establish how many Heron transformers will be delivered, when they will be installed, or how much data-center load they will serve. The reported information also does not give the commercial terms of Vantage’s reservation or the detailed construction schedule for the NiSource-Microsoft agreement.
Efficiency, copper savings and maintenance reductions cited for 800-volt systems come from vendors or vendor-sponsored analysis. The source material does not provide independent, in-service comparisons across data centers. Actual results could vary with facility design, workload, equipment and the existing power infrastructure.
It is also unclear how much new data-center demand will affect household bills in any particular area. The source report cites average U.S. residential electricity prices of 18.21 cents per kilowatt-hour in 2026, up from 17.30 cents in 2025, and a 41% rise in wholesale prices in the PJM region. Those figures describe different measures and geographies; they do not establish that data centers caused the changes. The allocation of costs for power plants and transmission infrastructure is set through contracts and regulatory decisions.
Watch for Installations and Grid Plans
The next evidence will come from equipment deliveries, facility deployments and operating data. Vantage’s reservation may lead to further announcements about manufacturing and installation, while NVIDIA has identified 2027 as the planned full-scale production period for its Kyber systems. Those milestones will show whether the designs move from plans into broader commercial use.
For the NiSource-Microsoft deal, follow-up information on generation construction, battery deployment and the contract’s operating arrangements will clarify how the additional capacity is expected to serve the data center and the wider grid. Utilities and regulators will also continue to determine how new generation and grid costs are recovered. Until those details and independent performance data emerge, the shift to 800-volt DC and batteries is a developing response to power constraints, not proof that one design will become standard.
Key Questions
What is the Vantage agreement?
Vantage reserved more than a gigawatt of factory capacity for Heron Power solid-state transformers designed to convert grid electricity to 800-volt DC. The reported reservation does not confirm installation of that capacity.
Why use 800-volt DC in a data center?
At high rack power levels, higher-voltage distribution can reduce the amount of current and potentially the copper needed to deliver power. It may also reduce conversion steps, though published savings are vendor claims and actual results depend on deployment.
Why are batteries part of the shift?
Batteries can provide backup power and help buffer rapid changes in AI facility demand. The IEA projects 20–25 gigawatts of data-center batteries by 2030, but that is a forecast, not a confirmed total.
Does this mean data centers are already moving entirely to DC?
No. The reported projects and designs show investment and planning, not a confirmed industry-wide conversion. Sidecar equipment could let operators add DC-powered racks while retaining much of an existing AC system.
Will the deals raise household electricity bills?
The effect on household bills is uncertain and location-dependent. Costs for new generation and grid infrastructure are allocated through contracts and regulatory decisions; the cited price changes alone do not show that data centers caused them.
Source: ThorstenMeyerAI.com
