A yr ago, Redwood Materials had no energy storage business. It is now the fastest-growing unit throughout the battery recycling and materials startup – a mirrored image of the boom in constructing AI data centers.
Proof of this growth, the corporate says, is its research and development lab in San Francisco, which has expanded fourfold to a 55,000-square-foot facility and now employs nearly 100 people. Those are small numbers in comparison with Redwood's total workforce of 1,200 employees and its sprawling headquarters campus in Carson City, Nevada, in addition to one other facility near Reno. But its value and up to date expansion are directly tied to the burgeoning energy storage that hit the market in June 2025.
At the San Francisco facility, which opened in April 2025, engineers are integrating 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 On Thursday, the expansion will support a wave of information center-related energy storage deployments. The company's recent $425 million Series E funding round will provide the capital needed to scale the business. Google, a brand new investor, in addition to existing backer Nvidia joined the round to support Redwood's energy storage business ventures.
“AI data centers have definitely been an urgent focus,” said Claire McConnell, vp of business development, in a recent interview with TechCrunch, adding that there are other use cases for its systems, including supporting renewable projects corresponding to solar and wind energy.
Data centers have been around for a long time, but advances in AI have led to a construction boom and a necessity for reliable power.
“What data center developers are seeing is something they hadn’t experienced before,” McConnell said. “When they struggle to hook up with the grid, they’re told it is going to take greater than five years to get there, and at the identical time you see huge demand to construct more data centers and join the AI competition.”
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Redwood Materials was founded in 2017 by former Tesla CTO JB Straubel to create a circular battery supply chain. It initially focused on recycling scrap from battery production and consumer electronics, which was processed after which sold to customers corresponding to Panasonic. The company also expanded into battery materials and now produces cathodes for battery cells.
The company opened Redwood Energy last summer to make use of the 1000’s of electrical vehicle batteries it collected through its battery recycling business to power businesses. Redwood Energy's first customer is Crusoe, a startup that Straubel invested in in 2021. Redwood has arrange an energy storage system that uses old electric vehicle batteries that usually are not yet ready for recycling. The system, which generates 12 MW of electricity and has a capability of 63 MWh, sends power to a modular data center built by Crusoe, an organization best known for its large data center campus in Abilene, Texas – the unique site of the Stargate project.
McConnell said customers within the pipeline include hyperscalers — firms that run massive cloud computing data centers and devour a whole lot of megawatts of power — which might far exceed the capability of the Crusoe project.
“We are working on a whole lot of megawatt-hours of power plants, and we now have multi-gigawatt-hour projects within the pipeline,” she said.
