C2i & Peak XV Target AI Power Bottlenecks in 2026

LONDON, February 16, 2026 — As artificial intelligence (AI) data centers grapple with power constraints, Indian startup C2i Semiconductors has secured $15 million in Series A funding led by Peak XV Partners. The funding aims to address the growing challenge of energy inefficiency in scaling AI infrastructure, according to a report by TechCrunch.

Executive Summary

• C2i Semiconductors develops system-level power solutions to address energy inefficiencies in AI data centers.
• The startup raised $15 million in a Series A round led by Peak XV Partners, bringing its total funding to $19 million.
• Other investors include Yali Deeptech and TDK Ventures.
• The funding comes as power consumption emerges as a critical bottleneck in AI infrastructure scalability.

Key Developments

The rapid growth of large-scale AI models has pushed the limits of existing data centers, not just in terms of computational power but also in energy efficiency. C2i Semiconductors, founded in India in 2024, focuses on solving this issue by developing plug-and-play, system-level power solutions. These solutions aim to minimize energy losses, making AI infrastructure more cost-effective and sustainable.

Peak XV Partners spearheaded the $15 million Series A funding, with additional contributions from Yali Deeptech and TDK Ventures. This latest round brings the two-year-old startup's total funding to $19 million. According to TechCrunch, the backing underscores the increasing importance of energy efficiency in AI infrastructure as power, rather than computational capacity, becomes the defining constraint in scaling operations.

C2i, which stands for Control, Conversion, and Intelligence, aims to disrupt the current energy management systems employed by data centers, which often struggle to keep up with the power demands of advanced AI systems. With this funding, C2i plans to accelerate the deployment of its technology, targeting both domestic and international markets.

Market Context

The AI industry has experienced exponential growth over the past decade, driven by advancements in machine learning models, natural language processing, and generative AI technologies. However, as AI models become more complex, they demand significant computational resources, leading to skyrocketing energy consumption in data centers worldwide.

Data centers already account for approximately 1% of global electricity consumption, according to the International Energy Agency (IEA). For more on [related data centers developments](/top-10-data-center-companies-by-market-cap-to-watch-in-2026-08-02-2026). With AI workloads projected to grow exponentially, the industry faces mounting pressure to address energy efficiency. Traditional power management systems, which were not designed for the unique demands of AI, are increasingly viewed as inadequate. This presents a significant market opportunity for disruptive startups like C2i.

India, in particular, is emerging as a key player in the global tech landscape, with a growing ecosystem of deep-tech startups. C2i’s success not only highlights the country’s potential in hardware innovation but also aligns with global trends prioritizing sustainable tech solutions.

BUSINESS 2.0 Analysis

The backing of C2i by Peak XV Partners is a strategic move that reflects a broader industry shift toward prioritizing energy efficiency in AI infrastructure. In a sector where GPU advancements and computational power have historically dominated the narrative, the focus is now shifting to the less glamorous but equally critical domain of power management.

The implications are significant. For one, the success of C2i could set a precedent for other startups to innovate in niche areas of the AI ecosystem, rather than competing directly with established giants like NVIDIA or Intel. The involvement of investors like TDK Ventures, known for their expertise in electronic components, and Yali Deeptech highlights the multidimensional approach needed to tackle this challenge.

Furthermore, this development underscores the growing role of Indian deep-tech startups in the global technology landscape. While India has long been a hub for software and IT services, the emergence of hardware-focused companies like C2i signals a diversification of the country’s tech portfolio. This aligns with government initiatives aimed at boosting semiconductor manufacturing and reducing reliance on imports.

From an investment perspective, the funding round also reflects a broader trend of venture capital firms targeting early-stage startups with solutions to systemic challenges in AI and tech infrastructure. With data centers set to play an increasingly pivotal role in the global economy, energy efficiency solutions like those offered by C2i could become indispensable.

Why This Matters for Industry Stakeholders

For data center operators, C2i’s solutions could provide a much-needed pathway to reducing operational costs and meeting sustainability targets. As power consumption increasingly becomes a bottleneck, efficiency gains could translate directly into competitive advantages.

For investors, the success of startups like C2i represents a new frontier in AI infrastructure, offering opportunities to back companies that address foundational challenges in the industry. For more on [related data centers developments](/top-10-ai-data-center-companies-to-watch-in-2026-usa-uk-europe-canada-uae-india-china-russia-israel-japan-11-december-2025). Additionally, for policymakers and regulators, advancements in energy-efficient technologies are critical to meeting global climate goals, particularly as data centers continue to expand.

Forward Outlook

Looking ahead, C2i’s ability to scale its technology will be a key determinant of its success. Partnerships with major data center operators and tech giants could provide the company with the market access and resources needed to commercialize its solutions on a global scale.

However, challenges remain. Competing technologies and the high cost of scaling hardware innovations could pose hurdles. Additionally, the company will need to navigate regulatory frameworks and secure intellectual property protections to maintain its competitive edge.

As AI continues to evolve, the focus on energy efficiency is likely to intensify. Startups like C2i are well-positioned to lead this charge, but their success will depend on their ability to execute effectively and adapt to a rapidly changing industry landscape.

Key Takeaways

• C2i Semiconductors raised $15 million in Series A funding led by Peak XV Partners.
• The startup develops system-level power solutions to improve AI infrastructure efficiency.
• Power consumption is emerging as a critical bottleneck in AI data center scalability.
• India’s deep-tech ecosystem is gaining global attention, with C2i as a key player.

References

1. Source: TechCrunch
2. IEA Report on Data Centers
3. More Data Centers Coverage