Heron Power, founded by Drew Baglino, a longtime Tesla veteran, raised $140 million this week for solid-state transformers, a technology designed to replace iron core power conversion units that have remained essentially unchanged for a century.
The investor list includes Andreessen Horowitz's American Dynamism Fund, Breakthrough Energy Partners, and Gigascale Capital, a lineup that reflects growing conviction that the bottleneck for AI infrastructure is not compute or models but the physical systems required to power data centres at scale.
Data centres account for roughly a third of Heron Power's target customer base, with significant non-data centre demand as well.
The company plans to begin pilot production in early 2027, with an eventual manufacturing target of 40 gigawatts per year.
Heron Power is not alone in this space. DG Matrix announced a $60 million raise in the same week.
The pattern of former Tesla employees founding energy infrastructure companies, including JB Straubel's Redwood Materials, which has moved into energy storage for AI data centres, suggests that a cohort of engineers who built their expertise on electric vehicle technology is now redirecting it toward the power demands of AI.