A year ago, Redwood Materials didn’t have an energy storage business. Now, it is the fastest-growing unit within the battery recycling and materials startup — a reflection of an AI data center building boom.
The evidence of that growth, the company says, can be found at its R&D lab in San Francisco, which has expanded four-fold into a 55,000-square-foot facility and now employs nearly 100 people. Those are small figures compared to Redwood’s total workforce of 1,200 people and its sprawling campus at its Carson City, Nevada headquarters and another facility near Reno. But its value and recent expansion are tied directly to its burgeoning energy storage that launched in June 2025.
The San Francisco facility, which opened in April 2025, is where engineers integrate the hardware, software, and power electronics for energy storage systems that power data centers, AI computing, and other large-scale industrial applications.
The company said in a blog post Thursday the expansion will support a wave of energy storage deployments related to data centers. The company’s recent $425 million Series E raise will provide the capital needed to scale the business. Google, a new investor, as well as existing backer Nvidia, joined the round to support Redwood’s energy storage business venture.
“AI data centers have definitely been a pressing area of focus,” Claire McConnell, vice president of business development told TechCrunch in a recent interview, who added there are other use cases for its systems including supporting renewable projects like solar and wind.
Data centers have been around for decades, but advancements in AI have spurred a building spree and a need for reliable electricity.
“What data center developers are seeing is something that they hadn’t experienced before,” McConnell said. “When they’re trying to connect to the grid, they are being told it is going to take five-plus years to get that and at the same time, you’re seeing this massive demand to build more data centers and compete in the AI race.”
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