SPAN wants to install mini data centers in your home—with subsidized electricity and internet

The newest AI boom pitch: Host a mini data center at your home

Data centers may be coming to your neighborhood as side installations associated with new homes -- and in exchange would offer subsidized electricity and Internet access along with backup batteries to homeowners. The company behind the plan has already begun pilot testing in preparation for a 100-home trial run this year. The "distributed data center solution" announced by the San Francisco startup SPAN would deploy thousands of XFRA nodes that contain liquid-cooled Nvidia RTX Pro 6000 Blackwell Server Edition GPUs operating with minimal noise, according to a press release. By harnessing excess power capacity among US households, SPAN aims to quickly expand the available compute for AI workloads without the costs and delays associated with trying to build warehouse-sized data centers. "Data centers are loud, ugly, and often drive up local electricity bills," said Chris Lander, vice president of XFRA at SPAN, in correspondence with Ars. "[This] is quiet, discreet, and makes energy more affordable for the host and community." SPAN's approach could avoid the significant land use and water consumption issues that come with huge data center projects, which may help sidestep growing community opposition to such developments. In a CNBC interview, SPAN also claimed it could install 8,000 XFRA units at a cost five times lower than building a typical 100-megawatt data center with the same compute capacity. Starting in 2027, SPAN plans to scale up to 80,000 XFRA nodes across the United States and provide more than 1 gigawatt of distributed compute. This network would not replace the centralized data centers being built by hyperscaler companies such as Google and Microsoft for the intensive training of AI models, but would instead be more suitable for supporting cloud gaming, content streaming, and AI inference, in which trained models are applied to real-world tasks. A SPAN whitepaper dangled the possibilities of retrofitting existing homes and installing larger node configurations for commercial customers. But the initial push would involve installing such nodes in newly constructed homes, with all the necessary equipment paid for and operated by SPAN. The homeowner experience So what does this mean for people who sign up to live in homes with attached data center nodes? SPAN would take on responsibility for paying the electricity and Internet bills for each household while offering residents either a flat utility fee -- the company floated the example of a $150 fee -- or possibly no fee at all, according to Realtor.com. The company is also still working out the specifics of household Internet service plans. Residents can generally expect to use household electrical appliances without interruptions, according to the company. SPAN's main strategy is to tap into excess power capacity in each home, with 200 amps of electrical service capacity representing the standard for most modern US homes built in the last 30 years. "Virtually all homes with 200-amp utility services have 80 amps available at all times, so we set that as the maximum power consumption for a single XFRA node," Lander said. He described how the XFRA nodes would "operate as always-on loads within verified residential capacity," meaning they would run around the clock under normal circumstances. A video animation distributed by SPAN suggests that an individual XFRA node would hold 16 Nvidia RTX Pro 6000 Blackwell Server Edition GPUs along with 4 AMD EPYC Server CPUs, backed by 3 terabytes of memory. The node installations alongside each house would be paired with a wall-mounted SPAN smart panel and a 16 kilowatt-hour battery -- overseen by SPAN's proprietary PowerUp software -- to help manage overall energy consumption. Rooftop solar panels may also be available in certain areas. If "rare residential peaks" in electricity usage occur, the system is designed to first use the home battery backup to keep the node running as usual, according to SPAN's white paper. In extreme cases, the system would temporarily reduce "non-critical flexible loads" like electric vehicle charging. However, homeowners would supposedly be able to use the PowerUp software to set priorities for what electrical loads can be curtailed and in what order -- and Lander emphasized that such events would be "rare and brief." Only events such as power outages, utility demand response events or safety-triggered shutdowns would lead to node interruptions. In those cases, the system would quickly shift the affected node's workload to other parts of the network before shutting it down. Meanwhile, homeowners would get to make use of the backup battery to keep appliances and circuits powered on during such events. "This home backup is provided to the host at no cost to them, contributing to greater energy resilience in addition to affordability," Lander said. The ups and downs of downsizing data centers SPAN has touted the benefits of its approach for utility companies scrambling to meet increased electricity demand from AI data centers. That pitch dovetails with SPAN's latest smart devices aimed at helping grid operators manage growing electrical loads without costly power infrastructure upgrades -- sidestepping the need to pass on infrastructure investment costs to customers through higher utility bills. "Networks of XFRA nodes make electricity more affordable for the entire community because they increase sales over grid infrastructure that already exists, saving utilities from costly upgrades to support big data centers," Lander said. The scheme for subsidizing homeowners' utility bills is "fascinating," Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, told Ars. However, he cautioned that utility companies may have to adapt their local grid management for residential neighborhoods where such nodes are embedded. "If there's a block that has several homes with these devices, maxing out compute and energy would force a lot of power to that local area," Peskoe said. Such a distributed computing network makes sense in that "computation for AI inference can and should be distributed at the 'edge,' deployed on smaller platforms closer to population centers and users," said Benjamin Lee, a computer architect and engineer at the University of Pennsylvania, in correspondence with Ars. "The strategy could impose much smaller impacts on the grid because inference requires a few GPUs, unlike training which requires thousands of them working in concert," he said. However, AI inference tasks can be as varied as document question-and-answer, software code generation, and multi-turn conversations -- each with different computational requirements and performance expectations, Lee cautioned. So it will be important to ensure that individual compute nodes can deliver the performance necessary for each task, along with maintaining network connectivity among the nodes. Lee also questioned whether it's necessary to downsize data centers to the "granularity of a few GPUs" in order to reduce their burden on the power grid. He speculated that deploying conventional 20-megawatt data centers instead of 1-gigawatt hyperscale data centers could prove similarly beneficial. Then there is the issue of security. XFRA nodes spread across suburbia could become more vulnerable to certain data security threats than centralized data centers. "Many side-channel attacks require physical proximity to the machine, which data centers can guard against," Lee said. "Distributed GPUs in individual homes are much more difficult to protect." Thieves may also see XFRA nodes alongside houses as a tempting target, given that the Nvidia GPUs within can each sell for around $10,000. Several comment threads on Reddit have already speculated on that possibility, with some commenters suggesting they would feel tempted to secure such compute resources for themselves as residents. "Of course, there is the risk of losing the actual hardware itself to theft," Lee said. Any potential benefits and complications will become more evident during SPAN's pilot deployment phase. But at a time when Silicon Valley is currently abuzz about orbital data centers and ocean-going AI data centers, data center nodes embedded in suburbia may stand on more solid footing -- at least until homeowner associations catch wind of them.

Fancy a Data Center in Your Backyard? Start-Up Wants Distributed Data Centers in Homes

SPAN claims consumers can slash their energy and internet bills, by installing a miniature 'distrbuted data center' in their own home. With concerns growing over environmental impacts and soaring electricity use, many Americans are none too keen on having a new data center built in their neighborhood. But what about a data center literally in the backyard? One start-up, SPAN, has partnered with chip giant NVIDIA on a plan to put small data centers inside Americans' homes. SPAN says these "distributed data centers" could work together to produce the same end result as today's large-scale facilities, powering things like AI and cloud gaming. SPAN, which launched in 2018, produces smart electrical panels that can provide granular breakdowns of household energy usage -- for example, how much electricity a refrigerator consumes. The new solution, which it calls XFRA, reportedly uses the built-in intelligence of SPAN's smart electrical panels to tap additional electrical service capacity from the existing grid. The company says it does not expect these mini data centers to replace traditional large-scale facilities, but rather to provide a "low-cost, low-latency solution that can scale quickly" amid record AI demand. SPAN is working with homebuilders like PulteGroup, one of America's largest residential home-construction companies, for the initial rollout of XFRA systems on-site. A SPAN spokesperson told Realtor.com that these mini data centers could also save consumers money. The spokesperson said the company "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." However, the spokesperson added that "the exact arrangement will vary from one neighborhood or region to the next." A SPAN spokesperson also told Realtor.com that the rollout has already begun, with the company targeting a 100-home proof of concept alongside PulteGroup and other homebuilder partners. The rollout will initially focus on newly built homes before later piloting retrofits for existing homes and smaller commercial properties.

Americans oppose huge AI data centers in their towns. Tiny ones in their homes may be a different story

Data centers are gobbling up land, driving up electric bills, and becoming a lightning rod for public discontent over big tech's power in society. Maine's legislature recently passed a data center ban in the state (but failed to override the governor's veto). According to the National Conference of State Legislatures, 14 states spanning the political spectrum from Oklahoma to New York are considering legislation that would ban or pause new data centers, as public opinion on AI has increasingly shifted to the negative. Still, despite the qualms of the public and politicians, there's a torrent of capital for building new data centers. The biggest technology companies in the U.S. are on pace to spend as much as $1 trillion annually by 2027 on AI, according to recent Wall Street estimates. Globally, a recent McKinsey report forecasts spending on data centers will hit $7 trillion by 2030. At the same time, the idea of putting data centers closer to consumers, even onto and into their homes, is gaining traction in real estate circles. Major players in housing, including homebuilder PulteGroup, are in early testing with Nvidia and California-based startup Span to install small fractional data center "nodes" on the exterior walls of newly built homes, according to recent reporting from CNBC's Diana Olick. The question of whether that model can scale, and whether homeowners, HOAs, and regulators will approve it, is up for debate. Experts point to some benefits to home-based data centers, with the home-based grid allowing for less construction needed on new ones and greater energy efficiency. "It is technically possible and already being explored," said Balaji Tammabattula, chief operating officer at BaRupOn, a U.S.-based energy and technology company currently building out a data center campus in Liberty County, Texas. He said just as a home computer can contribute processing power to a distributed network, a home can host compute hardware that feeds into a larger data processing system.

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

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 developments, one in Arizona and one in Georgia, took public water without authorization, and a recent study by the Houston Advanced Research Center projected the centers would drain as much as 399 billion gallons of water in Texas alone by 2030. "We know what a big project this is, and what a nuisance it's going to be, and what environmental impact it's going to have on this area," Kathryn Haushalter, a 42-year-old former U.S. Marine living in Saline Township, Michigan, across a future data center site, recently told Fortune. "I'm just so nervous for everybody else that doesn't realize." Span's XTRA models are part of a wider distributed network of AI infrastructure, using a home's underused electrical capacity to create something similar to a cloud of compute that can be given to service providers. Span can install nodes at six-times the speed of centralized 100-megawatt data centers and at about one-fifth of the cost of construction. The company charges a flat monthly fee of about $150. In return, it essentially pays a host's electricity and internet bills. The computing power generated from the nodes are distributed to customers like hyperscalers and AI companies. XFRA is not designed to replace commercial data centers, according to the company, but rather to reduce strain on the grid. Heata, a UK-based startup, also installs servers that act as a "virtual data center," processing cloud computing workloads. But it adds a twist by using thermal conductors to carry heat from computer processors to cylinders filled with water for home heating needs. The startup has installed units in about 100 homes and claims to have saved about 1 gigawatt-hour of energy. About 70% of the saved energy comes from less need to use domestic gas or electric heating systems in homes, while the remaining 30% comes from less of a need to cool data center processors. A Heata spokesperson told Fortune the company has generated 8 million liters of hot water, saving homes about $55,000 on energy bills. While these startups may promise to save both waste heat and money, Utah State University physics professor Robert Davies warned that efforts to modestly reduce the ecological harms of data center power usage and grid strain could actually exacerbate the problem. In a preliminary analysis, Davis calculated only 30%-40% of homes may be suitable for mini data centers or servers due to integration constraints, the need for stable internet, and participants being willing to have the technology installed in their homes. Separately, only 2%-3% of homes could realistically be heated through alternative energy-harnessing technologies because of constraints to how much waste heat can be collected. Additionally, there's a lot of heating energy that could go to waste because in many geographies, it's a seasonal need. Davies said these new technologies are truly helpful and could still benefit millions of households. But he cautioned that framing data center expansion as something that can be made more efficient could be a slippery slope in the bigger picture of the environmental impact of AI infrastructure. "These projects tend to be heavy on the benefit analysis and very light on the cost analysis," Davies told Fortune. "And you don't actually get a full sense of the cost until you do a whole systems analysis. These are multi-generational challenges, and are they solving problems that we really need solved?" He fears that increased efficiency of repurposing data center waste will encourage even greater data center expansion that further taxes the environment. He invoked Jevons paradox, a 160-year-old theory that says as a resource becomes more efficient to use, more, rather than less, of it is used. It was based on English economist William Stanley Jevons' observation that better steam engines made coal cheaper, subsequently increasing total coal consumption. "We now need about 45% less energy to do the same thing that we needed 35 years ago. So that seems awesome," Davies said. "Are we using 45% less energy than we were 30 years ago? The answer is, no. Turns out, we're using about 70% more energy." The Heata spokesperson said the company deals with substitution, not just increased efficiency, because homes must be heated whether or not one of its servers is present. If compute demand continues to rise, creating an integrated energy system to help fill heating demand becomes even more important, according to the company. Still, Davies is worried the demand for compute far outstrips capabilities to repurpose waste heat, and could lead to more data center construction that would further burden environmental capacity versus extend it. "The strategy that I see the sector applying here is seductive," he said. "It seems useful, we want it to be useful. But in a whole systems analysis, it's really not."

You can put a data center at your house -- but who really pays?

Nvidia has put its name behind a fledgling effort to put mini-data centers beside people's homes in boxes that look like HVAC units. It's a "power" play, considering that the main bottleneck to building out more data center capacity is not money or chips, but rather retrofitting the electrical grid to supply the power. The idea, put forward by a California smart utility box company called Span, is to put the GPUs where the power has already been allocated -- at the home. Span says the average household uses only about 42% of the electricity allotted to it, and rarely reaches peak usage. Span's smart utility boxes detect that, and steer the extra available power over to the GPUs, which live inside a "node" that sits beside the house and looks something like an HVAC unit. The boxes contain 16 Nvidia GPUs, 4 AMD CPUs, 4 terabytes of memory, and a cooling system. When a large number of homes have these, the servers could be connected together in a network and work together on distributed computing jobs (workloads), Span says. In exchange for hosting a node, Span pays a big chunk of the homeowner's electricity and broadband internet bills. And there may even be advantages for putting the compute power closer to the end users that are using the chatbots or AI services, Span says.