This is Henk Both, Principal at Anzu Partners, highlightingXGS Energy-one of Anzu's positions in critical power infrastructure - a company that sits at the center of what is shaping up to be one of the most consequential shifts in the U.S. power market in a generation.
Geothermal has always been the most compelling idea in baseload power and the most stubborn to scale. Hot rock is everywhere; usable hot rock with the right geology, water availability, and permitting is not. That constraint is what has kept geothermal at a small fraction of U.S. electricity generation, even though the underlying resource could theoretically power the entire grid many times over. XGS is the first company to credibly remove that constraint. The company has developed a closed-loop, water-independent system that works in any sufficiently hot rock, anywhere in the world.
The harder question has always been whether the technology works at commercial scale. Last September, XGS answered it. The company completed more than 3,000 hours of continuous operation at commercial scale in the field, with actual performance coming in within 2% of its predictive models. For anyone who has financed a first-of-a-kind power project, model accuracy of that order is what separates a science project from an investable asset.
The commercial execution since then has been equally significant:
In January, XGS announced a strategic supply agreement with Vallourec, one of the world's leading producers of premium steel tubular goods. Tubular goods are the specialized pipe that structures every deep well, and they represent the single largest bill-of-materials line in any at-scale geothermal build. Securing long-term, dedicated access to Vallourec's capacity is the kind of supply-chain lock-in that separates a company that can build one project from a company that can build a fleet.
In March, the company announced a collaboration with Baker Hughes on a 150 MW project in New Mexico that will deliver firm, dispatchable power to the PNM grid in support of Meta's data center operations.Fast Company has since ranked XGS #7 on its 2026 Most Innovative Energy Companies list, the highest-ranked geothermal company on the list, and TIME named the company to its2026 Top GreenTech Companies list.
The New Mexico project is the first visible commercial deployment, and it will not be the last. XGS is advancing a multi-project pipeline across the western United States with a mix of hyperscaler and utility counterparties, targeting gigawatt-scale deployment over the balance of the decade. The market context could not be more favorable. AI training and inference workloads are reshaping U.S. electricity demand faster than almost any forecast anticipated, hyperscalers are struggling to secure firm 24/7 power at the scale and timelines their data center buildouts require, and firm dispatchable capacity has become the single scarcest commodity on the grid.
In February, California regulators ordered an additional 6,000 megawatts of new clean energy and storage procurement by 2032, with an explicit carve-out for the clean, firm and long-duration resources that next-generation geothermal is uniquely positioned to deliver. PPA pricing for firm capacity has moved materially higher, and at-scale unit economics for next-generation geothermal look meaningfully different today than they did twelve months ago.
At Anzu, we evaluate a wide range of power and critical infrastructure opportunities, and we pass on most of them. XGS is the rare case where the physics, the unit economics, the team, and the timing all line up at once. Anyone watching the intersection of AI infrastructure and next-generation power generation would do well to pay close attention to what XGS delivers over the balance of the year.
Sincerely,
Henk Both, Principal, Anzu Partners
PORTFOLIO COMPANY UPDATES
Niron Magnetics Initiated a Formal Site Selection Process for New U.S. High-Volume Manufacturing (HVM) Plant
Niron Magneticsannounced that it is initiating a formal site selection process for a new high-volume manufacturing (HVM) plant in the U.S. The new plant is intended to significantly expand national production capacity for the next generation of permanent magnets that are critical across automotive, consumer electronics, industrial, and defense sectors.
The proposed 1,600,000 square foot project represents Niron Magnetics’ second U.S. plant and will enable the manufacturing of up to 10,000 tons of Iron Nitride permanent magnets annually. Once operational, the plant will support approximately 1-2% of the global permanent magnet market share. The project is anticipated to include up to $1.6 billion in capital investment and create more than 700 high-quality full-time jobs, representing a major economic development opportunity.
The new site under consideration is anticipated to begin construction in early 2028, and locations are being evaluated based on access to transportation infrastructure, energy capacity, workforce availability, and alignment with environmental and economic development priorities.
Niron Magnetics will share updates as key milestones in the site selection process are reached.
GelSight Awarded U.S. Air Force Phase II SBIR to Advance Compact Tactile Fingertip Sensors for Intelligent Robotic Grasping and Dexterity
GelSight®announced it has been awarded a Phase II Small Business Innovation Research (SBIR) contract from the U.S. Air Force to develop a compact, rugged tactile “digital fingertip” sensor designed to enhance intelligent robotic grasping and manipulation.
Under this Phase II award, GelSight will develop a next generation, miniaturized tactile sensor capable of delivering real-time 3D touch and force data to robotic grippers. The effort will focus on enhancing GelSight’s current robotic sensing products by reducing size, improving durability, and enabling fast data output suitable for defense robotics applications. GelSight will collaborate with Warner Robins Air Force Base to ensure the technology aligns with operational requirements.
ImmunoScape Announced Memorandum of Understanding for Clinical Trial with Premier U.S. Cancer Center
ImmunoScape announced the execution of a Memorandum of Understanding (MOU) with a premier NCI-designated Comprehensive Cancer Center in the United States, renowned globally for its pioneering history in cellular immunotherapy. This partnership will fast-track ImmunoScape’s “Seed and Boost” platform into the clinic. Concurrently, the company announced a strategic investment from Leonardo DiCaprio.
Under the terms of the MOU, ImmunoScape will partner with the cancer center to launch an investigator-initiated clinical trial targeting Wilms Tumor 1 (WT1) positive solid tumors. The trial will focus on four difficult-to-treat indications: ovarian, mesothelioma, and other high-unmet need solid tumors such as pancreatic and colorectal cancers. The study is scheduled to dose its first patients by September 2026.
Highlighting the global urgency for novel cancer interventions, Leonardo DiCaprio has joined ImmunoScape’s roster of investors to support the development of this platform.
“ImmunoScape is pioneering innovative cancer therapies, and its upcoming clinical trials targeting pancreatic, ovarian, and mesothelioma cancers are highly encouraging,” said Leonardo DiCaprio. “Through this investment, I hope to play a small role in helping accelerate their development.”
OTI Lumionics Established New Computational Chemistry Benchmark, Outperforming Traditional Quantum Models
OTI Lumionicsannounced a significant breakthrough in computational chemistry. The company has successfully run its Iterative Qubit Coupled Cluster (iQCC) algorithm using NVIDIA accelerated computing, achieving a new benchmark for what’s possible with material design simulations. This innovation enables the simulation of complex molecular systems with higher efficiency, speed and accuracy than ever before.
OTI Lumionics achieved a 90x performance increase by migrating these workloads from traditional central processing unit (CPU)-intensive environments to a single GPU. This innovation reduced individual calculation steps from several days to just ~one hour on a single NVIDIA Blackwell GPU.
For more information on this research, the technical paper is available on arXiv.
At the end of March, Anzu announced the promotion of Josh Stiling to Principal on the investment team.
Since joining Anzu in 2021, Josh has led and supported investments across the firm’s portfolio with a focus on the intersection of materials science, electrification, and manufacturing technologies. He has played a central role in Anzu’s investments inAM Batteriesand South 8 Technologies, two pioneering companies advancing next-generation battery technologies, as well as e-Zinc, Xendee,Voltaiq, and XGS Energy. Josh’s deep expertise in battery and energy storage technologies has been instrumental in shaping Anzu’s investment thesis in the industrial materials and energy space.
Please reach out to info@anzupartners.com if you’re interested in meeting with us at any of these events.
ADDITIONAL PC MEDIA COVERAGE
Niron Magnetics CEO Jonathan Rowntree appeared on an episode of Forbes’ C-Suite Unscripted podcast to discuss the company’s trajectory. Niron was also featured in an opinion piece published in The Washington Poston innovation to challenge China on critical materials.
South 8 Technologies was featured in a Washington Timespiece on arctic warfare and battery performance.
XGS Energy’s partnership with Baker Hughes was featured inESG Dive.
Xendee’s co-founderand CTO Dr. Michael Stadler contributed a piece on CHP and absorption chillers for data center developers to Power Engineering.
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ABOUT ANZU PARTNERS
Anzu Partners is an investment firm that focuses on industrial and life science technology companies with the potential to transform their industries. Anzu works with entrepreneurs to develop and commercialize technological innovations by providing capital alongside deep experience in business development, market positioning, intellectual property, global connectivity, and operations. For more information, please visit https://anzupartners. com/.
The information contained in this newsletter is being provided by Anzu Partners for informational purposes only. The information was obtained from various sources, but Anzu Partners cannot assure its accuracy. This is neither an offer to sell nor a solicitation for an offer to buy an interest in any fund managed by Anzu Partners. Any such offer or solicitation will only be made to qualified potential investors pursuant to a private placement memorandum. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
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