Redwood Materials, the battery recycling and energy storage company founded by Tesla cofounder JB Straubel, has secured Google as a new investor in an upsized Series E funding round that values the company at over $6 billion. The Nevada-based startup announced Wednesday it completed the final close of its financing, raising a total of $425 million—up from the previously announced $350 million due to strong investor demand.
Google joined the final closing alongside existing backers including Capricorn and Goldman Sachs. This investment adds another tech giant to Redwood’s investor roster, following Nvidia’s participation earlier in the round through its venture arm NVentures. The growing Big Tech interest reflects a strategic bet on Redwood’s energy storage business becoming critical infrastructure for the AI era.
Redwood Materials originally built its business on recycling lithium-ion batteries and recovering essential metals including lithium, nickel, and cobalt. However, the company has recently expanded into grid-scale energy storage through a new division called Redwood Energy, which repurposes used electric-vehicle batteries to store power and stabilize electricity supply.
The expansion comes as electricity demand surges from AI workloads, data centers, and broader electrification efforts. Redwood has positioned energy storage as no longer optional but essential as AI applications strain existing power grids. The company’s energy storage solutions are designed to support energy-hungry data centers that power AI systems.
Redwood plans to use the new capital to scale its energy storage platform while continuing investments in recycling and critical minerals processing within the United States. With both Google and Nvidia now backing the company, Redwood is strategically positioned at the intersection of AI infrastructure, energy security, and domestic supply chains—a combination that investors increasingly view as critical as the power demands of the AI economy accelerate. The investment underscores how tech giants are proactively addressing the massive energy requirements needed to support their AI ambitions.
Key Quotes
The company has argued that energy storage is no longer optional but essential as AI workloads strain existing grids.
This statement from Redwood Materials captures the urgency driving Big Tech investments in power infrastructure, highlighting how AI’s computational demands are creating unprecedented stress on electricity systems.
Our Take
This investment reveals a sophisticated understanding by Google and Nvidia that AI’s bottleneck may not be algorithms or chips, but electricity itself. The fact that two AI leaders are backing battery recycling and energy storage shows they’re thinking several moves ahead about infrastructure constraints. What’s particularly strategic is Redwood’s approach of using second-life EV batteries—this creates a circular economy that addresses both e-waste and AI power needs simultaneously. The $6 billion valuation also signals that investors see energy infrastructure for AI as potentially more valuable than many AI software companies. This could mark the beginning of a new investment trend where AI companies vertically integrate into energy infrastructure to secure their operational futures, similar to how they’ve invested in chip design and manufacturing.
Why This Matters
This investment signals a critical shift in how Big Tech is approaching AI infrastructure challenges. As AI models become more sophisticated and data centers multiply to support growing computational demands, power supply has emerged as a major bottleneck for the industry’s expansion. Google and Nvidia’s investments in Redwood Materials demonstrate that leading AI companies are taking energy infrastructure seriously and investing upstream in solutions.
The story highlights the hidden infrastructure costs of the AI boom—massive electricity requirements that existing grids struggle to support. By backing energy storage solutions using recycled EV batteries, tech giants are addressing both sustainability concerns and practical power needs simultaneously. This represents a convergence of the AI revolution with the clean energy transition, creating new business opportunities at their intersection.
For the broader AI industry, this development suggests that energy availability may become a competitive advantage for AI companies. Those who secure reliable, scalable power infrastructure could gain significant advantages in deploying and scaling AI systems, making energy partnerships increasingly strategic for tech companies’ AI ambitions.
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Source: https://www.businessinsider.com/google-redwood-materials-funding-round-2026-1