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The aging power grid could find a facelift in the form of next-gen transformers.

Demand for the technology is being fueled by massive energy needs of data centers.

Driving the news: Power gear giant Eaton announced on Wednesday that it plans to acquire solid state transformer startup Resilient Power Systems. Terms of the deal weren't disclosed.

Resilient Power lists data centers as a prime market for its tech. It had only raised $5 million from Energy Transition Ventures, Amazon's Climate Pledge Fund and GS Futures, the VC arm of Korea's GS Group, before getting acquired

How it works: Solid state transformers use semiconductor materials to control the flow of electric power more efficiently, more flexibly and in a more compact space compared to traditional transformers.

The big picture: Solid state transformers have been in development for years but have been too expensive and unreliable.

Companies have also struggled to develop the tech for medium voltage, which Resilient Power is targeting.

But startups with smart engineers are laser-focused on the tech problems.

State of play: While Wednesday's deal demonstrates big grid tech interest in solid state transformers, investors continue to plow money into startups, too.

Heron Power, launched by Tesla alum Drew Baglino, closed a $38 million Series A round this year from a roster of well-known climate investors, including Capricorn Investment Group's Technology Impact Fund, Breakthrough Energy Ventures, Energy Impact Partners, Gigascale Capital, Powerhouse Ventures, Valor Equity Partners, Tesla co-founder JB Straubel, and former Tesla CFO Zach Kirkhorn.

Solid state transformer startup DG Matrix just closed a $20 million round from Clean Energy Ventures, ABB, Cerberus Ventures, Chevron Technology Ventures and Piedmont Capital.

Singapore solid state transformer firm Amperesand bagged $12.45 million in seed funding last year from Xora Innovation, Material Impact, TDK Ventures and Foothill Ventures.

The bottom line: Low-cost, high-volume semiconductors are finally starting to have an effect on the industry for electrical gear.

Data center boom heats up solid state transformers

Illustration of a glowing lightning bolt symbol filled with binary code.

<p>The aging power grid could find a facelift in the form of next-gen transformers.</p><ul><li>Demand for the technology is being fueled by massive energy needs of data centers.</li></ul>

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Data center boom heats up solid state transformers

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