Akash Systems closes $300M deal for diamond-cooled AI servers that eliminate data center AC requirements

your wallet without exchanges or middlemen and spend with the Phantom card. And without further ado, our final guest of the Lambda Lightning round, we have Felix from Aash Systems. How are you doing, Felix? I'm good. I'm good. How are you? We're good. Good to meet you.

Uh, since it's your first time on the show, please introduce yourself and the company. Sure. My name is Felix Drachham. I'm founder and CEO of Akos Systems in the Bay Area. Amazing. What do you guys do? Uh we are a venture-backed company that makes diamond cooled servers for AI and cloud service providers. Okay.

Diamond. Very interesting. Yes. Very exciting. So I'm familiar with air cooling. I'm familiar with water cooling. What is diamond cooling? So diamond is interesting because it is not only a very beautiful material, but it is also the world's most thermally conductive material. It is extremely thermally conductive.

If I held a stick of diamond in my hands, uh, it would take the temperature of my body and move it very quickly through the entire material and propagate it to whatever is on the other end of that material.

What we do with a kosh is we take that diamond that's very pretty, but also very thermally conductive, and we place it right on the GPU. Mhm. So, a GPU, uh, for for those of you who don't know, is the hottest component of a computer or server.

So the things that answers your questions on chat GPT on claude uh the very essence of of the thing that does those questions is the GPU gets very hot. You've probably heard people talk about that. Uh and cooling it down can be very expensive if you use liquids.

But what we do is we take synthetic diamond grown in the lab with thermal conductivity. We put it on the GPU. It reduces temperatures by 10 15° C. That reduction causes a an acceleration in the inference of the GPU. It also reduces the cost of cooling the entire data center. Yeah.

So, so once the heat's transferred from the GPU die to the diamond, it's got to get shuffled away at some point. Yeah. Is that air or water? What how is it going to be moved away? So, yeah. So, we're compatible with liquid cooling.

If you want to have if you already have an infrastructure of liquid cooling would totally game for that. But if you don't have the capital to invest in a liquid cooling infrastructure, then you don't need it because you've got diamond that we provide on the GPU.

And so it goes from the diamond to a heat sink and then that goes to air. And so people that might have done a built a gaming PC, you put something directly on the CPU. Is that copper typically? Like what what that's typically copper.

And by the way, with a diamond cool server, you don't need to have your air conditioning on. You can literally turn off the AC in the room and the room can get as hot as 120° F and the servers literally like because shuffling it away so fast. Correct. So fast into the ambience and and you'd be fine.

We just released today a server made with an AMD chip. Yeah. That is cooled by diamond and that can operate at 120 degrees Fahrenheit and you would not need any liquids, no air conditioning and it would just be the computations would still be fine. Okay. What how much how much actual uh diamond is like?

What is the cost of is it like one very thin diamond or are we talking about something that like could fit on a ring? I love your questions. Um yes it is a very thin layer of diamond that we place on the material on the GPU and to your question about cost.

So the effect of this diamond cooling is that it generates about a million dollars by our conservative calculations about a million dollars of revenue and some cost savings to the operator of the GPU. And that's over typically a life lifetime use of around three to four years. Yeah.

So we're not just giving you compute, we're giving you cash. So roughly about a million. And so we take a slice of that to add on to the cost of a traditional server. So our servers uh the cost of our servers don't compare to the million dollars that you would get back in in returns. Yeah.

So I imagine you're literally you're icing out the GPUs. I love it. So, I imagine you I I imagine that a diamond cooling system has has got to be more expensive than the legacy system, but you're saving money on the on the on the energy cooling, the the AC, the water flow, all of that. Correct. So, less energy intense.

That's correct. And we're talking I mean, I can give you some numbers here. So, a typical server maybe like 250, 300K. Ours would be on the order of let's say 400K. Okay. So, but on the other hands over the 3 four years of use like you're going to get a million dollars.

And then also I imagine that you're on uh sort of a Moors law as scaling curve of your own costs because lab grown diamonds have gotten dramatically cheaper over the last decade and you expect that to continue. Okay, explain that. That's exactly right.

The cost of making diamond has literally collapsed through the through the floor. It's it's so low and that's just improved our economics. Okay. So, for for actually making the diamonds, you're working with a contract manufacturer who also makes diamonds for saws or diamonds.

We we s we we source diamonds from all over the world. We buy diamonds from wherever we can get them very cheaply. We have ways of growing them ourselves, but the interest of scaling rapidly, uh we buy diamonds from everybody.

As long as you can meet our uh both quality and cost requirements, we're happy to buy from you.

Yeah, I I remember seeing the uh I remember seeing the first lab grown diamond I don't know maybe 15 years ago and it was basically like a massive like dome that was putting an immense amount of pressure and it would come out with a with a a diamond shaped diamond. It was something that would belong on a ring.

Now I imagine as wafers and and GPU dyes have gotten bigger, you need to make a bigger lab grown diamond and then slice it. Can you walk me through like how are how are you dealing with like this the the the size of the GPU die that I would imagine is bigger than like a one karat stone? Yeah.

So you're you're very perceptive. The what you described is the oldfashioned way of making diamond where you try to replicate the conditions of the core of the earth. Oh yeah. Very high pressure, high temperature. What we do is something called chemical vapor deposition.

A more advanced way of making diamond where you don't need to get a massive thing. Yeah. To recreate the core of the earth. These reactors that we use are very small typically and the amount of diamond that we need is relatively small.

Y it needs to be cost effective and it needs to fit into the traditional size of a server. Folks who have purchased a diamond maybe for a loved one might be familiar with the four C's. Do any of those matter to you?

Can you use a lower quality diamond or is there a benefit to heat dissipation if you have a particularly clear diamond? Great question. The answer is yes. We don't quite use gem quality, beautiful, spectacular, twinkling little star diamond. Uh diamonds that we use are are actually what we call industrial diamond.

Uh so they're not pretty, but they do have an extremely high thermal connectivity, and that's the thing we care about. And so we use that uh for our our work. Are diamonds forever? Do you need to replace these at some point? Uh diamonds are forever. We actually reclaim the diamond.

So at the end of the the life of the server, we're we're happy to take the server back and pull the diamond out and and reuse it for our needs. Yes. Talk about flexibility of integration. Congratulations on the AMD deal, by the way. But uh it it feels like it's not rocket science to get this working on a different chip.

Uh walk me through that. It's not. Um so it is, but it isn't. It's taken us a long time to get here. Actually, this technology that we've deployed with the AMD chip actually started off in space. So we actually started off doing diamond cooling in satellites.

In fact, we last year we launched about a half a dozen satellites with diamond cooling. But then when we saw what was going on in AI and that the power densities in a GPU are actually a lot less than what we deal with in space and the fact that in space the conditions are much more harsh.

We're talking about solar radiation space radiation that's a lot more difficult and challenging to work with than what we have on a terrestrial. We said wait if we can address a problem in space we can definitely address the problem in a GPU.

And so that gave us the confidence to replicate what we now have on on grounds. So, and getting to space took us a long time. Um, and we're leveraging all of that to do this. So, we are uh the technology that we've deployed here is covered by dozens of patents.

Uh, there's a lot of material science and and device physics, but in the end, we're able to do it cost- effectively uh and scale rapidly for our customers. Amazing. I heard that there was a secret secret shopper who stopped by the diamond store, placed an order for a huge amount of your product. How much is the deal?

I know you can't tell us who who it is with, but I'd love to know the the size. I want to ring the bell. It is. It's a $300 million deal. You said the biggest. Congratulations. Uh that is amazing. This is amazing. What a remarkably sci-fi sci-fi product.

I I love this and thank you so much for taking the time to come talk to us. Do you have any other questions? This was great. Uh yeah. Are there any other interesting uh applications for diamonds that you can think of? I've heard of the diamond drill, the diamond saw.

I This was not on my bingo card, but should we expect big things from diamonds in the future if they get really really really really really cheap? Definitely. I mean, we get calls all the time. People want to put our stuff.

I mean, because we have the space heritage as well as now servers and GPUs, people want to now do data centers in space, of course. So, that's super sexy. Amazing. Uh, to be honest with you, just trying to execute what we have in front of us, uh, is already quite a a bit of a full plate.

But yes, there are applications in in in space as as we discussed uh applications in in other areas, industrial uh areas uh such as with Bitcoin mining.

That's something that requires a lot of compute and um so that we we do get pings, but right now we're very focused on just getting compute to data centers and cloud service providers uh and and AI companies. Well, Felix, thank you so much for taking time to come chat with us.

This was very fascinating and good luck today. We'll