Rapid Expansion Fueled by AI Data‑Center Growth

Redwood Materials, founded in 2017 to create a circular supply chain for batteries, has seen its energy‑storage unit outpace all other parts of the company. The surge is directly linked to a building boom in AI data centers, which demand reliable, large‑scale electricity. To support this, Redwood expanded its San Francisco research and development laboratory from a modest space to a 55,000‑square‑foot campus, increasing its staff to nearly 100 engineers and technicians. While the overall workforce remains about 1,200 employees across its Nevada headquarters and other sites, the San Francisco expansion underscores the strategic importance of energy storage for data‑center power needs.

Funding and Investor Backing

The company announced a $425 million Series E financing round that will provide the capital needed to scale the energy‑storage business. New investor Google joined the round alongside existing backer Nvidia, both of which see value in supporting Redwood’s ability to deliver power to AI‑intensive workloads. The infusion of capital is intended to accelerate product development, expand manufacturing capacity, and meet a pipeline of large‑scale projects that could reach multiple gigawatt‑hours of storage.

Early Deployments and Customer Pipeline

Redwood’s first energy‑storage customer is Crusoe, a startup that operates a modular data center built with used electric‑vehicle batteries not yet ready for recycling. The system delivers 12 MW of power and 63 MWh of capacity, illustrating Redwood’s model of repurposing retired EV batteries for grid‑level applications. Looking ahead, Redwood is targeting hyperscale cloud providers that consume hundreds of megawatts of power. Executives say the company is already discussing projects measured in “hundreds of megawatt‑hours” and “multiple gigawatt‑hours,” indicating a shift from pilot deployments to large‑scale commercial contracts.

Strategic Implications

The convergence of AI‑driven data‑center construction and the availability of reclaimed battery capacity positions Redwood Materials to become a key supplier of clean, reliable power. By leveraging its existing battery‑recycling operations, the company can offer storage solutions that support not only data centers but also renewable‑energy projects such as solar and wind. This dual‑use approach aligns with broader industry trends toward decarbonization and grid resilience.

Outlook

With substantial new financing, a growing customer base, and a clear market need driven by AI workloads, Redwood Materials’ energy‑storage division is poised for continued rapid growth. The company’s ability to scale its technology and integrate hardware, software, and power‑electronics engineering will be critical as data‑center developers seek faster grid connections and reliable power sources to stay competitive in the AI race.

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