With many communities resisting the massive data centers needed to power artificial intelligence, a California startup is betting that homeowners will embrace miniature versions right in their backyards.
The startup, Span, calls the concept "distributed data centers" and has partnered with AI chipmaker Nvidia to test the units in a handful of communities under construction by major homebuilder PulteGroup and additional homebuilder partners.
The idea is to make use of spare electrical transmission capacity already available in many neighborhoods—something Span says its smart panels can detect.
Rather than building massive new data centers, the company is proposing a network of small units, which it calls XFRA nodes, installed at homes across the country. Together, they could deliver the same computing power as a traditional warehouse-style facility, potentially easing the need for large-scale developments in any one community.
For big tech and AI companies, tapping into that network wouldn’t look much different than using a standard data center—they’d simply draw on the shared system.
The equipment itself is designed to blend in with the home’s exterior, with compact white XFRA boxes installed alongside things like air conditioning units and electrical panels.
"They are about the size of an HVAC condenser installed just outside of single-family homes today," a spokesperson for Span tells Realtor.com®.
Span says this approach could be built out far more quickly—and at a much lower cost—than constructing massive, centralized data centers.
Span told CNBC that it can install 8,000 XFRA units about six times faster and at five times lower cost than the construction of a typical centralized 100 megawatt data center of the same size.
"One big reason the XFRA model works is that the average American home only uses about 40 percent of its electrical capacity," a Span spokesperson tells Realtor.com. "As big data center developers struggle to find power sources and distribution capacity, XFRA uses capacity that’s already available."
The Nvidia connection
Span is incorporating technology from Nvidia into its system, including a liquid-cooled, fanless component inside the server. The design helps eliminate the noise typically associated with data centers—a frequent complaint in communities near large facilities.
“We’re trying to get access to power, and there’s a lot of power right now on the grid,” Marc Spieler, senior managing director of global energy industry at Nvidia, told CNBC. "But, unfortunately, to come up with large loads for big data centers—it’s a challenge.
“The ability to leverage existing locations that have access to power makes a lot of sense. … We believe that we can bring on AI solutions quicker, and it should add to the affordability story.”
Lower electric bills?
A Span installation typically includes a smart panel, an outdoor XFRA unit, a backup battery, and sometimes solar panels.
The company says the unit taps into unused power generation capacity to run the system.
"The exact arrangement will vary from one neighborhood or region to the next, but it’s likely that Span will take on paying the host’s electricity and internet bills directly, and charge a flat fee every month that’s much lower than what the host would otherwise pay to their electric utility and internet service provider," says a Span spokesperson.
"An example flat fee that we’ve shared previously is $150 per month, about half of what average Americans pay for their electricity and internet service. In some cases, there may be no fee at all."
Being tested on newly built homes
PulteGroup, one of the largest homebuilders in the U.S., is in the early stages of testing the XFRA technology as it evaluates performance and cost, a spokesperson told CNBC.
Span says XFRA is being installed during the construction process at no cost to the homeowner—and that the system has already been rolled out in a small number of communities.
“There is certainly opportunity, as Span can provide homeowners with access to innovative technology and potential income generation that can help offset monthly energy costs,” a PulteGroup spokesperson said in a statement to CNBC. “On a larger scale, if the technology proves out, it might also keep local infrastructure from being overburdened which could keep land open for other uses, such as building homes.”
A Span spokesperson tells Realtor.com that within the year, they will launch a 100-home proof of concept with PulteGroup and additional homebuilder partners.
"We will focus on deploying XFRA nodes with new residential construction at first, then look to retrofitting nodes onto existing residential and small commercial properties," the Span spokesperson says.
