# AI Data Center Surge Powers Redwood's Storage Growth
The explosive growth of AI data centers is fueling a transformative shift for Redwood Materials, as the battery recycling pioneer secures massive investments from tech giants like Google and NVIDIA to scale its energy storage solutions. With a landmark $425 million Series E funding round, Redwood is repurposing second-life batteries into low-cost microgrids, addressing the skyrocketing power demands that could see data centers consume 12% of U.S. electricity by 2028[1][3][6].
Tech Giants Fuel Redwood's $425M Bet on AI Power Needs
Redwood Materials, founded by former Tesla executive J.B. Straubel, has attracted high-profile investors including Google and NVIDIA in an upsized $425 million Series E round, valuing the company north of $6 billion. This capital injection, which expanded from an initial $350 million led by Eclipse Ventures and NVIDIA's NVentures, will accelerate Redwood's energy storage platform alongside its core battery recycling operations[2][4][5][8][9]. The funding underscores the convergence of battery recycling and AI infrastructure, as hyperscalers race to secure reliable, on-site power amid grid constraints[3][5].
Redwood's pivot positions it uniquely to tackle the AI power crunch. The company recovers over 90% of North America's recycled lithium-ion batteries and materials, processing more than 60,000 tons annually at its Nevada facility and ramping up at a $3.5 billion South Carolina campus[1][2][3]. This feedstock enables rapid deployment of second-life battery systems, offering a cost-effective alternative to new storage amid surging electricity needs from AI training and data processing[6][7].
Redwood Energy: Microgrids Powering the AI Revolution
Launched last summer as Redwood Energy, the storage arm has already deployed North America's largest microgrid—a 12 MW / 63 MWh system using low-cost second-life batteries to power a modular AI data center for Crusoe Energy at a cost below grid rates[1][3][6]. This proof-of-concept in Nevada demonstrates Redwood's Catalyst technology, which integrates packs from diverse EV chemistries and voltages into unified assets, enabling fast, scalable deployments[1].
Redwood boasts over 1 GWh in committed projects, with another 5 GWh expected soon, and ambitious plans for 20 GWh of grid-scale storage by 2028—including 100+ MW projects 10 times larger than its initial site[1][2][6]. These behind-the-meter microgrids bypass grid interconnection delays, providing resilient backup and grid-balancing for power-hungry data centers while extending battery life before full recycling[3][5]. As AI data center demand triples U.S. electricity needs to 106 GW by 2035, Redwood's approach is hailed as essential infrastructure[3][6][7].
Overcoming Recycling Challenges Amid Data Center Boom
The battery recycling sector faces input shortages, with Redwood relying heavily on manufacturing scrap and anticipating a wave of end-of-life EV batteries[1]. Its Nevada campus produces battery-grade copper foil and cathode materials, while South Carolina scales to 100 GWh annually, supporting a closed-loop supply chain for critical minerals like lithium, nickel, cobalt, and copper[3][4]. This vertical integration not only funds storage growth but aligns with U.S. Department of Energy grants for domestic processing[4].
Challenges persist, including vast land needs for deployments and potential community pushback, but the AI surge—projected to drive 12% of U.S. power use—makes storage indispensable[1][3][6]. Investments from tech leaders signal confidence in Redwood's ability to bridge recycling gaps and power the electrification era[5][7].
Strategic Implications for AI and Sustainable Energy
Redwood's growth highlights a broader trend: tech firms like Microsoft, Google, and NVIDIA are prioritizing on-site energy storage to sidestep grid bottlenecks and meet sustainability goals[3]. By repurposing 70%+ of recovered battery packs, Redwood cuts costs, reduces import reliance, and accelerates American innovation in AI and manufacturing[2][4][6]. As data centers expand, this model could redefine power infrastructure, blending recycling with hyperscale needs[5].
Frequently Asked Questions
What is Redwood Materials' main business pivot?
Redwood Materials is shifting from battery recycling to **energy storage** via Redwood Energy, repurposing second-life EV batteries into microgrids for **AI data centers**[1][5][6].
How much funding did Redwood raise and from whom?
Redwood secured a **$425 million Series E round**, backed by **Google**, **NVIDIA**, Eclipse Ventures, and others, upsized from $350 million[2][4][8][9].
What is the scale of Redwood's energy storage deployments?
Redwood has deployed a **12 MW/63 MWh microgrid** for Crusoe, with **1 GWh+ in pipeline**, targeting **20 GWh by 2028**[1][3][6].
Why is energy storage critical for AI data centers?
**AI data centers** could consume **12% of U.S. electricity by 2028**, straining grids; storage provides low-cost, resilient **behind-the-meter power**[3][6][7].
What recycling capacity does Redwood have?
Redwood processes **60,000+ tons annually** in Nevada, recovers **90% of North American lithium-ion materials**, and is expanding in South Carolina[1][2][3].
How does Redwood source batteries for storage?
Primarily from **manufacturing scrap** and **second-life EV packs**, with over **4 GWh expected** soon, bridging recycling input gaps[1][2].
🔄 Updated: 2/19/2026, 9:21:00 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
Redwood Materials, backed by new investors **Google** and **NVIDIA** in a $425 million Series E round upsized from $350 million, is intensifying competition in AI data center energy storage by repurposing second-life EV batteries into microgrids, including North America's largest at **12 MW/63 MWh** for Crusoe's modular data center.[1][4][5][6] This pivot positions Redwood ahead of traditional battery recyclers struggling with input shortages, leveraging its **20 GWh** annual capacity—about **90%** of North American recycled lithium-ion materials—to target surging demand where data centers could consume **12
🔄 Updated: 2/19/2026, 9:31:04 PM
Google has joined NVIDIA in backing Redwood Materials' $425 million Series E funding round, valuing the battery recycler above $6 billion as it pivots aggressively into energy storage for AI data centers.[4] The funding surge reflects intensifying competition in grid-scale power solutions, with Redwood now positioned as a dominant player controlling approximately 90% of all lithium-ion battery recycling capacity in North America and deploying the world's largest second-life battery microgrid—a 12-megawatt, 63-megawatt-hour installation powering Crusoe's data center infrastructure.[3][5] By 2028, data centers alone could consume 12%
🔄 Updated: 2/19/2026, 9:41:01 PM
**Google and NVIDIA back Redwood Materials' $425 million Series E funding round**, valuing the battery recycling and energy storage company at over $6 billion as AI data centers face an unprecedented power crisis.[4] The funding surge reflects demand for Redwood Energy's second-life battery storage solutions, which the company says are essential as data centers alone could consume 12% of U.S. electricity by 2028—more than triple 2024 levels—while traditional grid expansion cannot keep pace.[5][6] Redwood has already deployed North America's largest microgrid with 12 megawatts and 63 megawatt-hours capacity at an AI infrastructure company's
🔄 Updated: 2/19/2026, 9:50:57 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
Redwood Materials' $425 million Series E round—upsized from $350 million with new investments from **Google** and **NVIDIA**—marks a seismic shift in the competitive landscape, positioning the battery recycler as a frontrunner against traditional grid-tied storage providers amid AI-driven power shortages.[1][4][6][9] "As electricity demand surges—driven by AI, data centers, manufacturing and electrification—energy storage is no longer optional; it is **essential infrastructure**," Redwood stated, highlighting its edge with over **1 GWh** of second-life batteries in the pipeline, expanding by **5 GWh** soon
🔄 Updated: 2/19/2026, 10:01:13 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
Redwood Materials' energy storage division, propelled by global AI data center power demands projected to reach 106 gigawatts in the U.S. alone by 2035, is scaling rapidly with over 1 GWh in its deployment pipeline and plans for an additional 5 GWh, utilizing 20 GWh of annual recycled battery capacity—nearly 90% of North America's lithium-ion recycling.[2][4][5][6] International hyperscalers like Google and NVIDIA are responding with major investments, including a $425 million Series E round, enabling Redwood's microgrid deployments such as North America's largest 12 MW/63 MWh system fo
🔄 Updated: 2/19/2026, 10:11:24 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
The AI data center boom is driving Redwood Materials' energy storage division to become its fastest-growing unit, with over 1 GW of committed projects and plans for 5 GW more in the next year, utilizing 20 GWh of annual recycled battery capacity—about 90% of North America's lithium-ion recycling—to stabilize global power grids strained by volatile AI workloads[2][3][5]. Google and NVIDIA's investments in the company's upsized $425M Series E round underscore international Big Tech commitment, as Redwood deploys solutions like its 12 MW/63 MWh microgrid for Crusoe, addressing projections of U.S. data center demand tr
🔄 Updated: 2/19/2026, 10:22:02 PM
Redwood Materials, founded by Tesla's ex-CTO JB Straubel, reports its energy storage division as the **fastest-growing unit**, propelled by AI data center power demands that require grid-stabilizing batteries for volatile GPU workloads[1][3]. The company just closed an upsized **$425 million Series E round** with new investors Google and NVIDIA, funding expansion of its storage platform alongside recycling operations that process 60,000 tons annually and access 20 GWh of battery capacity[2][4][5][7]. Highlights include North America's largest 12-MW/63-MWh microgrid for Crusoe data centers using second-life batteries, plus over 1 GWh in pipeline projects scaling to
🔄 Updated: 2/19/2026, 10:31:08 PM
**NEWS UPDATE: Regulators Eye Redwood's Storage Expansion Amid AI Data Center Grid Strain**
No direct regulatory actions or government responses target Redwood Materials' energy storage growth, despite the AI data center boom straining U.S. grids—projected to demand 106 gigawatts by 2035, over three times 2024 levels[7]. Data center developers increasingly pair storage with renewables as "table stakes" for securing permits and power agreements, while large-scale deployments face community opposition over land use[3][4]. Redwood's 12 MW/63 MWh microgrid for Crusoe in Nevada marks North America's largest to date, aiding behind-the-meter power to bypass grid delays[5].
🔄 Updated: 2/19/2026, 10:41:55 PM
**AI Data Center Surge Powers Redwood's Storage Growth**
Redwood Materials has emerged as a major player in grid-scale energy storage, with its energy storage division becoming the company's fastest-growing unit after launching just nine months ago in June 2025.[1] The battery recycler secured a **$425 million Series E funding round**, upsized from the originally planned $350 million, with new backing from Google joining existing investor Nvidia to support the expansion.[1][7] Redwood now operates North America's largest microgrid—a 12 MW/63 MWh system powering an AI data center for Crusoe—and has over 1 gigaw
🔄 Updated: 2/19/2026, 10:52:13 PM
Redwood Materials' energy storage division has emerged as its fastest-growing business unit, capturing a competitive advantage in a market reshaping around AI infrastructure demands.[1][2] The company secured a $425 million Series E funding round—upsized from $350 million—with Google joining existing backer Nvidia as investors, signaling major tech players' recognition of energy storage as critical infrastructure for data center operations.[1][4] Redwood's competitive edge stems from its integrated supply chain: it processes 60,000 metric tons of battery materials annually at its Nevada facility and leverages access to 20 gigawatt-hours of annual recycled battery capacity—approximately 90% of all lithium-
🔄 Updated: 2/19/2026, 11:00:34 PM
I cannot provide the market reactions and stock price movements you've requested because the search results do not contain information about stock price performance or market reactions to Redwood Materials' announcements[1][2][3][4][5][6][7][8][9][10]. The available sources focus on the company's $425 million Series E funding round, its rapidly expanding energy storage division, and operational developments, but do not include financial market data or investor sentiment metrics. To obtain this information, you would need access to financial news sources, stock market databases, or market analysis reports.
🔄 Updated: 2/19/2026, 11:10:40 PM
I cannot provide the market reaction and stock price movement information you've requested. While the search results contain substantial details about Redwood Materials' $425 million Series E funding round and its rapidly expanding energy storage business—including specifics like the 55,000-square-foot San Francisco facility employing nearly 100 people and pipeline projects reaching multiple gigawatt-hours in capacity[2]—they do not include any stock price data, trading volume, or market analyst reactions to these announcements.
To write an accurate news update on market reactions, I would need sources containing stock performance data, investor commentary, or analyst assessments from financial markets, which are not present in the available search results.
🔄 Updated: 2/19/2026, 11:20:37 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
Redwood Materials' pivot to energy storage has reshaped the competitive landscape in battery recycling, transforming its new division—launched June 2025—into the company's **fastest-growing unit** amid surging AI data center demand, outpacing its core operations that process **60,000 tons** of materials annually.[1][2][3] New investments from **Google** and **Nvidia** in a **$425 million Series E** (upsized from $350M) position Redwood to challenge hyperscalers with projects scaling to **hundreds of MWh** and **multiple GWh**, including North America's largest microgrid at **1
🔄 Updated: 2/19/2026, 11:30:32 PM
**NEWS UPDATE: AI Data Center Surge Powers Redwood's Storage Growth**
Industry experts highlight Redwood Materials' energy storage division—launched just eight months ago—as its fastest-growing unit, propelled by AI data centers' volatile power demands that traditional grids can't handle.[1][2] Redwood VP McConnell revealed pipeline projects scaling to "hundreds of megawatt hours" and "multiple gigawatt hours" for hyperscalers, beyond their initial 12 MW/63 MWh Crusoe deployment, with a recent $425M Series E (led by Google and Nvidia) fueling a four-fold R&D expansion to 55,000 sq ft employing nearly 100.[1][3][6] Redwood states, "A
🔄 Updated: 2/19/2026, 11:40:34 PM
Redwood Materials announced Thursday that its energy storage division—launched just a year ago—has become the company's **fastest-growing unit**, driven by surging AI data center demand, with its San Francisco R&D lab expanding four-fold to a **55,000-square-foot facility** employing nearly **100 people**[2][3]. The startup closed an upsized **$425 million Series E funding round** backed by new investor Google and existing backer Nvidia to scale deployments, including North America's largest microgrid at **12 MW/63 MWh** powering a Crusoe modular data center, with hyperscaler pipelines for projects in the **hundreds of MWh** and **multiple GWh**[1][2][4]