Drogue raises $20 million to develop ocean-powered data centers

Founded six months ago, Drogue aims to offer data center developers a faster route to power than conventional projects, which co-founder and CEO Sam Sipe said can take eight to 10 years to coordinate with utilities and regional grid operators. He said AI demand has risen tenfold in three years, a pace he described as incompatible with those timelines.

The company’s process, known as ocean thermal energy conversion (OTEC), uses warm surface water to cool servers and then boil ammonia. The gas drives a turbine to generate electricity before cold water drawn from 1,000 meters below the surface condenses it back into liquid. The ammonia circulates through a sealed loop. Sipe said deep water averages about 39°F (4°C), and that extracting heat would not collapse the temperature difference the system relies on.

Drogue’s prototype is designed for a traditional ship; later versions may use floating structures resembling offshore oil platforms. The company is buying its first vessel and has received “approval in principle” from the American Bureau of Shipping, a preliminary sign-off. Sipe said each vessel would remain at sea for about a decade. The company argues that data centers suit offshore power because servers are compact and data can be transmitted cheaply, avoiding the expense of cables to shore.

The approach builds on OTEC work developed in the 1950s and tested in the 1980s. Sipe said manufacturing advances in pipes and heat exchangers have changed since then. Investors in the $20 million round include XYZ Venture Capital, Toyota Ventures, Tamarack Global, Dream, FDVC, Garuda Ventures, Flexcap, Boost VC and Slow Ventures, among others.