The amount of data between AI is increasing Redwood’s energy storage business

A year ago, Redwood Materials had no energy storage business. Now, it’s the fastest-growing segment within battery recycling and retooling — a reflection of the growing AI data center boom.

Evidence of this growth, the company says, can be found on its own R&D lab in San Francisco, which has quadrupled to a 55,000-square-foot facility and currently employs about 100 people. That’s a small number compared to the 1,200 people who work at Redwood and its campuses in Carson City, Nevada’s capital, and other locations near Reno. But its importance and recent expansion is directly linked to its energy storage facility which was launched in June 2025.

The San Francisco facility, which opened in April 2025, is where engineers integrate hardware, software, and electronics for energy storage systems that power data centers, AI computing, and other large-scale industrial applications.

The company he said in a blog post Thursday’s expansion will support energy-saving measures related to data centers. The latest company $425 million Series E The promotion provides the necessary funds for business expansion. Google, a new investor, as well as an existing sponsor of Nvidia, has stepped in to support Redwood’s energy storage business.

“The AI ​​data center has become a very important area,” Claire McConnell, vice president of business development told TechCrunch in a recent interview, adding that there are other uses for its systems including supporting renewable energy projects such as solar and wind.

Data centers have been around for decades, but advances in AI have boosted buildings and the need for reliable electricity.

“What data center developers are seeing is something they’ve never seen before,” McConnell said. “When they try to contact the team, they are told that it will take five years to get this and at the same time, you see a great need to build a data center and compete in the AI ​​competition.”

Redwood Materials was founded in 2017 by ex-Tesla CTO JB Straubel to develop circuits for supplying batteries. It initially focused on recycling waste from battery and consumer electronics manufacturing, which was processed and sold to customers such as Panasonic. The company also expanded into the battery equipment business and today manufactures cathodes for battery cells.

The company was opened The cost of Redwood Energy last summer to use the thousands of EV batteries it collected as part of its battery recycling business to provide power to the industry. Redwood Energy’s first customer is Crusoe, a startup in which, in 2021, Straubel invested. The system, which produces 12 MW and has a capacity of 63 MWh, sends power to a data center built by Crusoe, a company best known for its large data center in Abilene, Texas – the first site of the Stargate project.

McConnell said customers in the pipeline include hyperscalers — companies that use large cloud computing centers and use megawatts of power — that could surpass the power of his and Crusoe’s projects.

“We’re working on hundreds of megawatt hours, and we have pipelines that are several gigawatts,” he said.