Bloom Energy Claims Fuel Cells Could Save AI Data Centers Billions

Bloom Energy claims its fuel cells could save a large AI data center $3.6 billion in non-chip construction costs, according to a cost model it released on September 16. The company estimates that a 1-gigawatt AI data center powered by its systems would spend 27% less on construction than one relying on standard alternating current (AC) power. Over five years, Bloom projects a total ownership cost reduction of $5.5 billion, or 9%. These potential savings are substantial compared to Bloom's expected revenue of $3.9 billion to $4.2 billion for 2026.

The savings arise because Bloom's solid oxide fuel cells generate 800-volt direct current (DC) electricity on-site, eliminating the need for AC-to-DC conversion equipment. This could reduce the demand for transformers and switchgear, which can take years to procure. However, Nvidia, a key player in AI data centers, plans to introduce 800-volt DC racks starting in 2027, potentially reducing the need for Bloom's fuel cells. Nvidia's design converts AC grid power to DC once at the data center's edge, which could cut into Bloom's savings claims.

Despite these claims, Bloom Energy's stock, trading around $289 as of this writing, remains 18% below its 52-week high of $351.28. The company's second-quarter product revenue was about $935 million, over three times the year-ago level, but product gross margins have remained steady at around 36.5%. While Bloom's cost savings argument is credible, the article suggests waiting to buy the stock until a major data center operator commits to its 800-volt design.