Redwood Materials raises $425M as Google backs energy storage for AI growth

What’s the deal? Redwood Materials has closed its Series E funding round at a total of $425 million, up from the $350 million announced earlier, after bringing Google in as a new strategic investor. The US-based battery recycling and materials company said the additional capital will support the expansion of its energy storage business.

The round was extended rather than newly launched, with Google joining existing backers as AI-driven power demand reshapes energy infrastructure priorities.

Why now? The extension comes as hyperscalers face growing pressure to secure reliable, low-carbon energy sources for AI data centres. Energy storage has become a critical bottleneck, pushing tech companies to invest directly in suppliers rather than rely solely on utilities.

For Redwood, the timing also aligns with rising policy and commercial momentum around domestic battery supply chains in the US.

What could go wrong? Despite strong demand signals, scaling battery recycling and materials production remains costly and operationally complex. Redwood must balance rapid expansion with execution risk in a highly competitive market.

The company also faces exposure to commodity price swings, which could affect margins as capacity ramps up.

The signal: The deal highlights how AI growth is pulling capital into adjacent infrastructure sectors, particularly energy storage and battery materials. Rather than backing pure software plays, big tech is increasingly investing in the physical systems that enable AI at scale.

Redwood’s extended Series E shows how climate tech and AI infrastructure are converging, with energy resilience becoming as strategic as compute itself.

Sources:
TFN
TechCrunch
Battery Tech

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