An AI data center boom is fueling Redwood’s energy storage business

Redwood Materials, originally focused on battery recycling and materials, has rapidly expanded into the energy storage sector over the past year, driven by a surge in AI data center construction. The company’s San Francisco facility, which opened in April 2025 and recently quadrupled in size to 55,000 square feet with nearly 100 employees, serves as the hub for integrating hardware, software, and power electronics for energy storage systems. These systems support data centers, AI computing, and large-scale industrial applications. The expansion aligns with growing demand as data center developers face long grid connection delays amid a rapid AI-driven building boom. Redwood’s recent funding round, including new investment from Google and continued support from Nvidia, aims to scale this energy storage business. Founded in 2017 by former Tesla CTO JB Straubel, Redwood initially focused on recycling battery scrap and producing battery materials like cathodes. The company launched its energy storage business in June 2025 by repurposing used EV batteries to provide power solutions