Data center-as-a-service startup ECL said today it has closed on a $10 million investment from Hyperwise Ventures.

The funding came as the company, incorporated at Edge Cloud Link Inc., unveiled the first delivery of its modular, off-the-grid data center that’s powered entirely by hydrogen. ECL said the funds from today’s round will be used to accelerate its research and development efforts and expand its global footprint as part of its push to take on traditional data center infrastructure providers with a more sustainable alternative.

The company believes its modular data centers are unique in that they’re designed from the ground up to support high densities of graphics processing units, which are increasingly in demand as the backbone of generative artificial intelligence and other AI workloads. They also incorporate innovative cooling technologies that use water created by their own hydrogen-based power generation systems, combined with proprietary rear-door heat exchange technology. This enables what the company calls “high-density rack cooling” that completely eliminates the need to use local resources.

Other benefits of the startup’s modular data centers include sustainability, with the company promising no carbon emissions ad extremely low noise levels. They’re more affordable than traditional data centers too, since they can be built using 3D printers, much faster than traditional facilities. Because there’s no need to connect utilities, the planning and construction cycle ranges from just 18 to 24 months needed today to as little as six to nine months.

The hydrogen power comes from fuel cells, and the energy they create drives every process within ECL’s data centers via a circular system that’s designed to maximize power efficiency.

ECL said its data centers have an industry-leading Power Usage Effectiveness ratio of just 1.05, versus 1.57 for the average traditional colocation data center. It also claims higher rack densities, meaning it’s possible to squeeze more servers into its facilities compared to other designs.

Portability is another advantage, because with zero reliance on local energy sources or water supplies, the data centers can be built practically anywhere. Should there not be any network connectivity in the chosen area, ECL says its networking partners can provide this using a fiber optic cable and cloud interconnect via a network-as-a-service model.

The modular design gives customers greater flexibility too, with the possibility of starting small and expanding as they need to scale up their operations.

ECL, which last raised funding in January 2023, said the cloud-based bare metal server provider Cato Digital Inc. has the honor of being its first customer, deploying at its inaugural data center facility in Mountain View, California. Cato offers a Flex Metal service that’s designed to reduce wastage and advance its customer’s sustainability goals by deploying second-life servers that bring compute resources closer to their users.

Cato Digital’s chief executive officer Dean Nelson said ECL’s facilities are a novel offering that is well suited to the demands of AI workloads, which are placing legacy data center infrastructures under incredible strain. “ECL is contributing to the advancement of global data center sustainability initiatives in an unprecedented way, setting a new standard for excellence in the design, development and delivery of hydrogen-powered facilities that no one had thought could be brought to market for five or more years,” he said.

Though ECL’s first data center will cater to cloud service providers, it says it can support enterprises too. It offers three different data center designs, including the option of a facility that’s built to the customers’ exact specifications, for a onetime fee. In addition, it offers a build-and-operate model, where it manages the data center on customer’s behalf, charging a monthly fee for doing so.

Holger Mueller of Constellation Research Inc. said ECL is innovating not only the design of data centers, but also the way they are powered, with its decision to go with hydrogen fuel cells. “Hydrogen has a lot of promise but it has under-delivered until now,” the analyst said. “But ECL’s proposed system, which optimizes the data center design by using hydrogen to drive every process, is something that will likely do very well. It’s going to be interesting to see how ECL progresses now that it has launched its first data center in Silicon Valley.”

ECL founder and CEO Yuval Bachar says the company can cater to anyone, from the likes of Amazon Web Services Inc. and Google LLC, to smaller, midsized companies that need their own data centers. He’s convinced there will be big demand for its services in future, as many data center operators believe hydrogen is the best fuel option thanks to its efficiency, reliability, sustainability and impressive safety record.

One problem Bachar thinks his company can solve is that, although many companies want to reengineer their existing data centers to run on hydrogen fuel cells, the significant costs involved make this prohibitive.

“ECL has broken the mold, embracing not only hydrogen but the opportunity to support the ever-increasing space, power and cooling demands of the AI industry in the race to realize all of its projected benefits,” he said.

Featured image: SiliconANGLE/Microsoft Designer