Mazama Energy raises $135M to power AI with geothermal heat

Geothermal startup Mazama Energy just raised $135 million in a Series B round that’s already oversubscribed, signaling serious investor confidence in enhanced geothermal as a solution for powering the next generation of AI data centers.

The funding will accelerate development of horizontal wells drilled into super-hot rock capable of generating 15 megawatts of electricity per well. Mazama plans to start generating actual electricity next year, with its first Oregon site now capable of producing 10 gigawatts of electricity, up from the 5 gigawatt estimate made just last year by investor Vinod Khosla.

Deep drilling, extreme heat

What makes Mazama different from traditional geothermal projects is the depth and temperature they’re targeting. The company has already drilled past 10,000 feet in just 15 days, working toward depths around 15,000 feet. At those depths, they access rock heated to 750 degrees Fahrenheit (400 degrees Celsius).

At such extreme pressures and temperatures, water transforms into something called a “supercritical” fluid, which exists in a state between liquid and gas. This unique state allows it to absorb far more energy than ordinary steam, enabling each well to produce up to 10 times more power than conventional geothermal technologies.

The potential is staggering. According to research from the University of Twente and the Clean Air Task Force, tapping just 1% of the world’s super-hot rock reserves could generate more than 63 terawatts of electricity.

The dark horse in data center power

While tech companies and data center developers have largely placed their bets on natural gas infrastructure, enhanced geothermal startups are quietly advancing their technology at a rapid pace. Mazama represents a different bet: that we can tap Earth’s interior for clean, reliable baseload power at the scale data centers need.

The company’s ambitions extend beyond its Oregon test site. Mazama has already secured land for a second development and aims to complete the first site by 2030, when it projects the facility will generate 200 megawatts of electricity.

The Series B was led by Centaurus Capital and Doerr Capital, with additional support from energy giants ConocoPhillips and Shell Ventures. Existing backers like Khosla Ventures returned alongside new investors including SiteGround Capital and the Jeffrey and Marieke Rothschild Foundation.

What this means for clean energy

The oversubscribed round and high-profile backing suggest the investment community sees enhanced geothermal as more than just another cleantech experiment. It’s increasingly viewed as a viable baseload power source for massive energy loads.

Data centers powered by AI models consume enormous amounts of electricity continuously. Unlike solar or wind, geothermal provides consistent, predictable power generation day and night. Enhanced geothermal’s ability to locate wells almost anywhere with deep enough drilling capability makes it attractive for companies seeking to reduce dependence on natural gas while maintaining reliability.

The timing is crucial. As AI adoption accelerates and data centers multiply globally, the energy demand crisis is real. Mazama’s technology, if it scales as planned, could fundamentally reshape how we power computing infrastructure. That’s why oil and gas companies like Shell and ConocoPhillips are participating in this round, they understand deep drilling expertise translates directly to geothermal success.

The next few years will be telling. Mazama’s projected 2025 electricity generation from its Oregon site will either validate the enhanced geothermal promise or expose its limitations. Either way, the startup’s progress suggests that Earth’s heat might become one of AI’s most important power sources.

Source: TechCrunch