Karman Brings Solution to Water and Energy Intensive AI Data Centers

Karman Industries is offering a solution to the high volumes of water and energy being consumed by data centers used in the fast-growing artificial intelligence sector.

This Signal Hill-based company that started up in 2024 uses a thermal energy model where heat processing units (HPUs) consolidate massive thermal management infrastructure into high-density modular packages. Karman Industries specializes in decarbonizing manufacturing and data centers with advanced heat pump technology.

Last month, the company announced the launch of its HPU, a modular 10MW integrated thermal platform engineered to solve the “speed-to-power” crisis facing “AI hyperscalers.” HPUs optimize energy consumption, providing the most efficient cooling while unlocking heat reuse for power generation or district heating – unlocking rapid deployments while eliminating water consumption, the company said in a statement.

The “AI hyperscalers,” and “gigascale AI factories,” that Karman Industries refers to could include tech majors like Google Cloud, Amazon Web Services (AWS), Microsoft Azure, Meta, Oracle and Nvidia; and it could include AI giants like OpenAI, Anthropic and xAI; and large data center enterprise providers.

Client names have yet to be provided. Karman expects to begin initial customer deliveries in the third quarter of this year from its Los Angeles-based GigaWerx manufacturing facility. Designed for 1GW of annual production, the facility is part of a roadmap to quickly reach 4GW of annual capacity to meet the global surge in AI factory demand, the company says.

“In the race to stand up AI capacity, time is the most expensive variable,” said David Tearse, CEO and co-founder of Karman Industries in a company statement. “We’ve moved beyond the era of legacy chillers to HPUs. By shrinking the footprint of the mechanical yard by 80%, we don’t just save land; we eliminate the ‘snowball effect’ of infrastructure complexity, allowing hyperscalers to move from ‘shovels in the ground’ to ‘chips in the rack’ many months faster while unlocking additional compute.”

“Shrinking the footprint of the mechanical yard by 80%” refers to simplifying design of its 10MW HPUs, which Karman says dramatically reduces the number of units to be installed, piped, and wired on-site. It shrinks the exterior mechanical yard by 60% to 80%, freeing up valuable land for additional compute capacity.

Optimizing thermal architecture maximizes resource allocation towards the computing process. That level of efficiency means zero water consumption across all operating conditions, “future-proofing facilities against water-scarcity regulations and community pushback,” the company said it is announcement.

Karman has said that its HPU is similar to offerings from another Space Beach neighbor, SpaceX. That would be the SpaceX Raptor engine in terms of speed, pressure and temperature. Following that lead brings the turbomachinery pumps up to a high speed and performance level, the company says.

Along with its HPU launch, the company also disclosed a $20 million Series A led by Riot Ventures in September 2025, bringing total funding to over $30 million. Other major participants included Sunflower Capital, Space VC, Wonder Ventures, and former Intel and VMware CEO, Pat Gelsinger.

Adding to LB Energy Efficiency

Many consumers and business owners have been voicing concerns in the past year or more about data centers driving up consumption and cost for both energy and water. These data centers were growing before AI came to market, with demand coming from cryptocurrency and electronics including smartphones and other devices needing a lot of charging. They’re worried about their electricity and utility bills shooting up, and brownouts, blackouts, and severe water scarcity becoming a regular occurrence.

The City of Long Beach and the Port of Long Beach, along with companies that have operations in the city, have been taking all of it seriously in recent years. Much of that comes from tapping into alternative energy sources and energy storage systems – prioritizing efficiency and sustainability.

Industrial gases supplier, Air Products, which is also the world’s leading supplier of hydrogen, has operations set up in Long Beach near Anaheim St. and the I-710 Freeway in west Long Beach. The company just announced that it was recently awarded supply contracts from the National Aeronautics and Space Administration (NASA) totaling more than $140 million to provide liquid hydrogen for several NASA facilities including the world’s largest hydrogen sphere at NASA’s Kennedy Space Center, the Cape Canaveral Space Force Station and other NASA locations.

In 2023, FuelCell Energy and Toyota Motor North America completed of the first-of-its-kind “Tri-gen system” at Toyota’s Port of Long Beach operations. The Tri-gen system, owned and operated by FuelCell Energy, produces renewable electricity, renewable hydrogen and water from directed biogas. FuelCell Energy contracted with Toyota to supply the products of Tri-gen under a 20-year purchase agreement.

Long Beach’s Aquarium of the Pacific has installed three fuel cells (1.2 megawatts total) from Doosan Fuel Cell America to offset approximately 80% of the facility’s energy consumption.

The City of Long Beach has installed solar panels on parking garages and city facilities such as the Long Beach Airport. These projects, part of a 6-megawatt initiative, reduce reliance on the main grid, and future projects are incorporating battery energy storage systems (BESS) for direct, onsite storage.

Karman has been working hard on tapping into the latest in technology innovations and sustainability practices that can be utilized for its offerings.

“Keeping up with the latest in technology, the HPU leverages 800V DC architecture while borrowing the latest innovations in rocket turbomachinery like metal 3D-printing, and electric vehicles innovations like high-speed motors & Silicon-Carbide power electronics technology,” said CJ Kalra, CTO and co-founder.

Jon LeSage is a resident of Long Beach and a veteran business media reporter and editor. You can reach him at jtlesage1@yahoo.com.