Investing.com -- As hyperscalers race to build out AI infrastructure, the bottleneck is no longer semiconductor chips; it is power.

Hyliion, which has seen its stock surge more than 258% year-to-date, is positioning its KARNO Power Module as a solution for data centers that increasingly cannot rely on the electrical grid.

In an interview with Investing.com, CEO Thomas Healy said he believes the company's technology addresses a structural problem that is only getting worse.

"What we hear from data center operators is that the bigger constraint is electrical grid interconnect capacity, not fuel supply," Healy said. "Waiting years for a utility to approve a grid connection is a real bottleneck. Natural gas infrastructure, comparatively, is already built out across most of the markets these hyperscalers want to build in."

The KARNO system operates on standard utility-grade natural gas at 5 to 25 PSI, requiring no specialized fuel logistics.

Healy said the unit targets 50% fuel-to-electricity efficiency, well above the U.S. grid average of 36%, and produces native 800V DC output that eliminates conversion losses common in AC-based alternatives. The company also said the system qualifies for a 30% Investment Tax Credit.

For a retail customer in New York currently paying $0.22 per kilowatt-hour from the grid, Healy said Hyliion's analysis showed it could deliver electricity at under $0.17, inclusive of fuel, maintenance, and capital amortization.

The company recently completed UL certification testing for its 200 kW Power Module and is targeting commercial deployment in late 2026.

Larger multi-megawatt configurations aimed specifically at data centers are also in development, underpinned by a U.S. Navy contract Healy said validates the company's multi-unit stacking architecture.

"The 800 kW Navy platform development in 2026 is significant because it validates our multi-unit stacking architecture, which is the foundation of the multi-megawatt system we're designing for data centers," he said.

Hyliion currently has nearly 750 KARNO Cores under non-binding letters of intent, representing approximately $400 million at current pricing. Healy said the near-term focus is converting that pipeline into executed agreements ahead of a planned manufacturing scale-up in 2027.

Looking ahead, Healy stated: “This year, we are anticipating to add $40 to $50 million in military contracts across multiple branches, the commercial structure of those agreements will evolve. But the foundation right now is a deep technical partnership, not just a transaction.”

The company also highlighted fuel flexibility as a longer-term differentiator, noting that the same hardware can transition from natural gas to hydrogen blends without infrastructure changes.