An AI data center boom is fueling Redwood’s energy storage business

A twelvemonth ago, Redwood Materials didn’t person an vigor retention business. Now, it is the fastest-growing portion wrong the artillery recycling and materials startup — a reflection of an AI information halfway gathering boom.

The grounds of that growth, the institution says, tin beryllium recovered astatine its R&D lab successful San Francisco, which has expanded four-fold into a 55,000-square-foot installation and present employs astir 100 people. Those are tiny figures compared to Redwood’s full workforce of 1,200 radical and its sprawling field astatine its Carson City, Nevada office and different installation adjacent Reno. But its worth and caller enlargement are tied straight to its burgeoning vigor retention that launched successful June 2025.

The San Francisco facility, which opened successful April 2025, is wherever engineers integrate the hardware, software, and powerfulness electronics for vigor retention systems that powerfulness information centers, AI computing, and different large-scale concern applications.

The institution said successful a blog station Thursday the enlargement volition enactment a question of vigor retention deployments related to information centers. The company’s caller $425 cardinal Series E rise volition supply the superior needed to standard the business. Google, a caller investor, arsenic good arsenic existing backer Nvidia, joined the circular to enactment Redwood’s vigor retention concern venture.  

“AI information centers person decidedly been a pressing country of focus,” Claire McConnell, vice president of concern improvement told TechCrunch successful a caller interview, who added determination are different usage cases for its systems including supporting renewable projects similar star and wind.

Data centers person been astir for decades, but advancements successful AI person spurred a gathering spree and a request for reliable electricity.

“What information halfway developers are seeing is thing that they hadn’t experienced before,” McConnell said. “When they’re trying to link to the grid, they are being told it is going to instrumentality five-plus years to get that and astatine the aforesaid time, you’re seeing this monolithic request to physique much information centers and vie successful the AI race.”

Redwood Materials was founded successful 2017 by erstwhile Tesla CTO JB Straubel to make a circular proviso concatenation for batteries. It initially focused connected recycling scrap from artillery accumulation and user electronics, which was processed and past sold to customers specified arsenic Panasonic. The institution besides expanded into the artillery materials concern and contiguous produces cathodes for artillery cells.

The institution opened Redwood Energy past summertime to leverage the thousands of EV batteries it has collected arsenic portion of its battery-recycling concern to supply powerfulness to companies. Redwood Energy’s archetypal lawsuit is Crusoe, a startup that, successful 2021, Straubel invested in. Redwood setup an vigor retention strategy that uses aged EV batteries that are not yet acceptable for recycling. The system, which generates 12 MW of powerfulness and has 63 MWh of capacity, sends powerfulness to a modular information halfway built by Crusoe, a institution champion known for its large-scale information halfway field successful Abilene, Texas — the archetypal tract of the Stargate project. 

McConnell said customers that are successful the pipeline see hyperscalers — companies that run monolithic unreality computing information centers and devour hundreds of megawatts of powerfulness — that would acold transcend the capableness of its task with Crusoe.

“We’re moving connected ones successful the hundreds of megawatt hours, and we person ones successful the pipeline that are aggregate gigawatt hours,” she said.