Startups are installing tiny data centers in people’s homes to reduce strain on the beleaguered electrical grid

Amidst the anxiety and disdain for data center growth, startups see an opportunity by designing mini data centers to install in homes that have less of a financial burden on residents, as well as a potentially lower ecological footprint than warehouse data centers. California-based Span, in partnership with Nvidia, has deployed prototype data center “nodes” in Northern California. The cabinet-sized units, dubbed XFRA, are installed on the sides of homes and small businesses. Requiring no fans, the technology is quiet, mitigating the problem of noise pollution that has drawn the ire of residents of areas with nearby warehouse data centers. Ryan Harris, chief revenue officer of Span, said the company estimates XFRA will be able to generate about one to two megawatts worth of compute later this year, scaling across the country to an annual capacity of more than 1 gigawatt beginning next year. PulteGroup, among the largest homebuilders in the U.S., is testing the system. Nvidia will provide the liquid-cooled RTX PRO 6000 Blackwell Server Edition GPUs for the system. “We do see a path to being able to contribute on an annual basis hundreds of megawatts, if not gigawatts, of scale compute capacity, while doing so in a deflationary-to-energy-price way,” Harris told Fortune. All the while, tensions between hyperscalers and residents have been mounting over AI’s rising costs and environmental impacts. With data centers the size of dozens of football fields combined sprouting up around the country, residents have protested the construction of AI infrastructure, which McKinsey projected to touch $7 trillion in capital expenditures by 2030. The warehouses erected to store and process massive amounts of data have strained the U.S.’s already beleaguered grid system, potentially driving up electric bills by 6% over the next year, according to Goldman Sachs research. That’s on top of concerns that data centers are guzzling water as part of their cooling systems. Two data center dev