Google Joins Redwood Materials’ $425 Million Funding Round to Power AI Data Centers with Recycled Batteries

In a bold move that underscores the explosive intersection of artificial intelligence, energy storage, and sustainable technology, Google has stepped into the ring as the latest investor in Redwood Materials, the pioneering battery recycling and cathode production startup founded by former Tesla CTO JB Straubel. The company’s Series E funding round, which initially closed at $350 million last October, has now surged to a hefty $425 million, with Google joining forces alongside returning backers like Capricorn and Goldman Sachs, as well as strategic investors such as Nvidia’s venture arm, NVentures.

This new influx of capital not only propels Redwood’s total private funding to an impressive $2.3 billion but also signals a seismic shift in the tech world’s approach to energy infrastructure. While Redwood has long been recognized for its groundbreaking work in recycling batteries and extracting critical materials like lithium and nickel, its latest venture into energy storage is turning heads—and opening wallets.

The AI Data Center Energy Crisis

The backdrop to this funding frenzy is the skyrocketing demand for data centers, driven largely by the AI boom. These data centers, which power everything from ChatGPT to autonomous vehicles, are notorious energy hogs, and the grid is struggling to keep up. Enter Redwood Energy, the company’s newly minted division that repurposes used EV batteries into microgrids capable of powering industrial sites and AI data centers.

Redwood’s approach is as ingenious as it is timely. By recovering more than 70% of all used or discarded battery packs in North America, the company has amassed an inventory of over 1 gigawatt-hour of storage capacity, with another 4 gigawatt-hours expected in the coming months. By 2028, Redwood aims to deploy a staggering 20 gigawatt-hours of grid-scale storage—enough to power thousands of homes or, more pertinently, dozens of energy-hungry data centers.

Why Google, Nvidia, and the Rest Are Betting Big

For tech giants like Google and Nvidia, the appeal is clear: energy storage is no longer a “nice-to-have” but an essential piece of infrastructure. As AI models grow ever larger and more complex, the need for reliable, sustainable power sources becomes paramount. Redwood’s ability to recycle and repurpose batteries not only addresses this need but does so in a way that aligns with the industry’s growing emphasis on sustainability and circular economies.

Google’s involvement is particularly noteworthy. The search giant has been vocal about its commitment to carbon neutrality and renewable energy, and its investment in Redwood Materials signals a strategic bet on the future of energy storage. Similarly, Nvidia, whose GPUs are the backbone of modern AI, sees energy storage as a critical enabler for its data center customers.

A Billion-Dollar Valuation and a Bright Future

While Redwood has not disclosed its exact valuation, sources familiar with the deal suggest that the company’s post-money valuation now sits north of $6 billion—a significant jump from its previous valuation of just over $5 billion. This meteoric rise reflects not only the company’s technological prowess but also the growing recognition of energy storage as a linchpin of the AI and clean energy revolutions.

The Road Ahead

As Redwood Materials continues to scale its operations, the implications for the tech industry—and the planet—are profound. By turning the problem of battery waste into a solution for the energy crisis, Redwood is charting a course toward a more sustainable, resilient future. And with heavyweight investors like Google and Nvidia now on board, the company is well-positioned to lead the charge.

In a world where the demand for power is only going to grow, Redwood Materials is proving that the key to the future might just lie in the batteries of the past.

Tags: Google, Redwood Materials, battery recycling, energy storage, AI data centers, JB Straubel, Nvidia, NVentures, sustainable technology, cathode production, circular economy, gigawatt-hours, microgrids, clean energy, tech investment, data center power, lithium, nickel, EV batteries, grid-scale storage

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