An AI data center boom is fueling Redwood’s energy storage business
#Redwood Materials #Energy Storage #AI Data Centers #Battery Recycling #JB Straubel #Google Investment #Power Infrastructure #EV Batteries
📌 Key Takeaways
- Redwood Materials' energy storage business has rapidly become their fastest-growing unit
- The company expanded its San Francisco R&D lab to 55,000 square feet to support the energy storage division
- Redwood secured $425 million in Series E funding with Google and Nvidia as investors
- AI data centers are driving demand for energy storage solutions due to massive electricity requirements
- The company is developing projects in the hundreds of megawatt hours with some reaching multiple gigawatt hours
📖 Full Retelling
Redwood Materials announced in October 2026 that its energy storage business has become the fastest-growing unit within the battery recycling and materials startup, a development directly fueled by the AI data center building boom. The company's rapid expansion is evident at its San Francisco R&D lab, which has grown four-fold into a 55,000-square-foot facility employing nearly 100 people, while its Nevada headquarters and additional Reno facility support its 1,200-person workforce. Redwood's energy storage division, launched just 16 months prior in June 2025, focuses on creating systems that power data centers, AI computing, and large-scale industrial applications, addressing the growing electricity demands from AI advancements. The San Francisco facility, opened in April 2025, serves as the hub where engineers integrate hardware, software, and power electronics for energy storage systems. In a blog post published Thursday, Redwood highlighted that its expansion will support a wave of energy storage deployments specifically for data centers. The company recently secured $425 million in Series E funding, with Google joining as a new investor alongside existing backer Nvidia, providing the necessary capital to scale this burgeoning business. 'AI data centers have definitely been a pressing area of focus,' stated Claire McConnell, Redwood's vice president of business development, noting that their systems also support renewable energy projects like solar and wind power. Founded in 2017 by former Tesla CTO JB Straubel, Redwood Materials initially focused on recycling battery scrap from production and consumer electronics before expanding into battery materials production. The company launched Redwood Energy in 2025 to leverage thousands of collected EV batteries for power provision, with Crusoe as its first customer. Redwood implemented a 12 MW, 63 MWh energy storage system using EV batteries not yet ready for recycling to power Crusoe's modular data center in Abilene, Texas. McConnell revealed that the company is now working with hyperscalers - massive cloud computing operators that consume hundreds of megawatts of power - with projects in the pipeline reaching multiple gigawatt hours in capacity, far exceeding their initial Crusoe deployment.
🏷️ Themes
Energy Storage, AI Infrastructure, Battery Recycling, Technology Investment
📚 Related People & Topics
J. B. Straubel
American businessman (born 1975)
Jeffrey Brian Straubel (; born December 20, 1975) is an American businessman and electrical engineer. He spent 15 years at Tesla, as chief technical officer until moving to an advisory role in July 2019. In 2023, he was elected to the company's board of directors.
Energy storage
Captured energy for later usage
Energy storage is the capture of energy produced at one time for use at a later time to reduce imbalances between energy demand and energy production. A device that stores energy is generally called an accumulator or battery. Energy comes in multiple forms including radiation, chemical, gravitationa...
Redwood Materials
American battery-recycling company
Redwood Materials, Inc. is an American company headquartered in Carson City, Nevada. The company aims to recycle lithium-ion batteries and produce battery materials for electromobility and electrical storage systems.
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Original Source
A year ago, Redwood Materials didn’t have an energy storage business. Now, it is the fastest-growing unit within the battery recycling and materials startup — a reflection of an AI data center building boom. The evidence of that growth, the company says, can be found at its R&D lab in San Francisco, which has expanded four-fold into a 55,000-square-foot facility and now employs nearly 100 people. Those are small figures compared to Redwood’s total workforce of 1,200 people and its sprawling campus at its Carson City, Nevada headquarters and another facility near Reno. But its value and recent expansion are tied directly to its burgeoning energy storage that launched in June 2025. The San Francisco facility, which opened in April 2025, is where engineers integrate the hardware, software, and power electronics for energy storage systems that power data centers, AI computing, and other large-scale industrial applications. The company said in a blog post Thursday the expansion will support a wave of energy storage deployments related to data centers. The company’s recent $425 million Series E raise will provide the capital needed to scale the business. Google, a new investor, as well as existing backer Nvidia, joined the round to support Redwood’s energy storage business venture. “AI data centers have definitely been a pressing area of focus,” Claire McConnell, vice president of business development told TechCrunch in a recent interview, who added there are other use cases for its systems including supporting renewable projects like solar and wind. Data centers have been around for decades, but advancements in AI have spurred a building spree and a need for reliable electricity. “What data center developers are seeing is something that they hadn’t experienced before,” McConnell said. “When they’re trying to connect to the grid, they are being told it is going to take five-plus years to get that and at the same time, you’re seeing this massive demand to build more data c...
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