Google just placed a major bet on solving AI's biggest infrastructure problem. The tech giant joined Redwood Materials' $425 million Series E round, backing the battery recycler's ambitious pivot into energy storage for data centers. With AI models devouring electricity at unprecedented rates and grid capacity maxed out, Redwood's second-life battery business could become critical infrastructure for the industry's next phase of growth.
Redwood Materials just closed one of the year's most telling funding rounds. The company's Series E ballooned from $350 million to $425 million as Google joined existing backers, pushing total capital raised to $4.9 billion and the valuation past $6 billion. But it's not the battery recycling that's attracting Silicon Valley's biggest names - it's what comes next.
Founded in 2017 by former Tesla CTO JB Straubel, Redwood built its business on creating a circular supply chain for batteries. The Carson City, Nevada operation recycles scrap from battery production and consumer electronics, extracting materials like nickel and lithium that would otherwise need to be mined. Those processed materials flow to customers like Panasonic for new battery production. It's a solid cleantech play that's been steadily growing.
But last summer, Redwood launched something different. Redwood Energy takes EV batteries that aren't quite ready for recycling and transforms them into micro-grids capable of powering AI data centers and large industrial sites. That pivot caught the attention of the industry's power-hungry giants.
"As electricity demand surges - driven by AI, data centers, manufacturing and electrification - energy storage is no longer optional; it is essential infrastructure," the company said in a blog post announcing the funding. It's a pointed statement that reflects the growing panic around data center capacity.
