As innovative and forward-moving artificial intelligence has been, it’s also setting world leaders back – at least in terms of energy efficiency and climate change goals. AI models demand copious amounts of electricity to run through billions of parameters, and water to then cool down those systems.

Once-neglected power plants are now tasked with processing AI’s insatiable hunger for energy while everyone from college students to the biggest companies in the world adopt this technological juggernaut in one way or another.

That’s what Brad Hartwig wants to solve. His company, El Segundo-based Arbor Energy, announced in late October that it raised $55 million in series A funding for its low-energy turbine technology. The round was co-led by Lowercarbon Capital and Voyager Ventures, with additional participation from Marathon Petroleum Corp. and Gigascale Capital.

Supply shortage and gas-guzzling sector

When Hartwig co-founded Arbor Energy in 2021, the goal was to manufacture energy-efficient turbines to decarbonize the global economy. He didn’t expect companies like his would be in such high demand four years later.

Arbor Energy is attempting to replace gas-fired turbines, the traditional equipment used in data centers to supply power. The dramatic increase in demand for these turbines has forced companies to wait as long as seven years for a more expensive product, and the world’s three largest suppliers are only making dozens of large turbines a year.

“How can we meet the energy needs of AI?” Hartwig said. “We think there’s so much benefit that AI could bring to the world, but how do we do that in a way that doesn’t immediately have this negative externality on the environment of adding more emissions?”

While those companies wait, Arbor Energy is building an alternative. The fresh fundraising is going to help Arbor develop and scale Halcyon, a modular turbine that is smaller than its conventional counterpart and can grow as a data center facility grows. It uses supercritical carbon dioxide, a high-pressure carbon dioxide working fluid that can deploy the same power as a traditional turbine in a smaller package.

The goal is to manufacture these turbines to be flexible, easier and faster to build when demand spikes, and made from materials that are easy to source domestically.

“The AI revolution demands unprecedented amounts of clean, reliable power, and Arbor delivers exactly that,” Sarah Sclarsic, the founding and managing partner at Voyager Ventures, said in a statement. “Arbor’s modular gas turbines provide the baseload capacity that data centers need, with the speed and flexibility that traditional infrastructure simply can’t match.”

Los Angeles’ power demand

Los Angeles, home to one of the most infamous data centers in the world, is getting ready to build more data centers. Swathes of Los Angeles County that have been untouched by residential and retail development have become a hotbed for data centers, and, after years of inactivity, new supply has begun to take root in the area. Per a report from Jones Lang LaSalle Inc., 400 megawatts of power are underway for Southern California.

“California is the epicenter for tech innovation and creation, right?” said Darren Eades, the Southern California technology and data center real estate expert at JLL. “…Traditionally, L.A. was thought as a secondary market, and that is definitely changing just due to tech innovation.”

At the same time, cleantech companies like Arbor are basking in the spotlight in L.A. The confluence of energy demand due to AI, and a resurgence in domestic manufacturing due to tariffs and geopolitical tension are reviving the region’s reputation as a west coast manufacturing powerhouse. Cleantech companies in the area have raised 5% of the world’s cleantech funding in 2025, per PitchBook.

“In many ways (AI is) kind of catalyzing the renaissance of infrastructure just because it is so energy hungry,” Hartwig said. “AI is just going to become a layer to so many different verticals and parts of the economy, parts of our lives. And that is just going to continue to consume huge amounts of power.”