An AI data center boom is fueling Redwood’s energy storage business
Source: TechCrunch
Redwood Materials’ energy‑storage unit has become the fastest‑growing division of the battery‑recycling startup, driven by a surge in AI data‑center construction.
Expansion of the San Francisco R&D lab
The company’s R&D lab in San Francisco has quadrupled to a 55,000 sq ft facility and now employs nearly 100 people. The lab is where engineers integrate hardware, software, and power electronics for energy‑storage systems that serve data centers, AI computing, and other large‑scale industrial applications.
Funding to scale the business
Redwood’s recent $425 million Series E round—backed by new investor Google and existing backer Nvidia—will fund the scaling of its energy‑storage venture. The capital is intended to support a wave of deployments tied to data‑center projects.
“AI data centers have definitely been a pressing area of focus,” said Claire McConnell, vice president of business development, in an interview with TechCrunch. She added that the systems also support renewable projects such as solar and wind.
AI data‑center demand
Advancements in AI have accelerated data‑center construction, creating a need for reliable, on‑site electricity. Developers report grid connection timelines of five plus years, prompting interest in Redwood’s storage solutions.
Redwood Materials background
Founded in 2017 by former Tesla CTO JB Straubel, Redwood Materials originally focused on recycling scrap from battery production and consumer electronics, supplying material to customers like Panasonic. The company later expanded into battery‑materials production, now manufacturing cathodes for battery cells.
Launch of Redwood Energy
Last summer, Redwood launched Redwood Energy, leveraging thousands of EV batteries collected through its recycling operations to provide power to corporate customers.
- First customer: Crusoe, a startup in which Straubel invested in 2021. Redwood installed a system using pre‑recycling EV batteries that delivers 12 MW of power with 63 MWh of capacity to a modular data center built by Crusoe.
- Future pipeline: McConnell indicated that Redwood is pursuing projects in the hundreds of megawatt‑hours, with some pipelines targeting multiple gigawatt‑hours.