Redwood Materials has emerged as a key beneficiary of the global AI data center expansion, with its energy storage division becoming the fastest-growing part of the company.

Just a year ago, the business unit did not exist.

The growth is most visible at Redwood’s San Francisco research facility, which has expanded fourfold into a 55,000-square-foot lab employing nearly 100 people.

Opened in April 2025, the site focuses on integrating hardware, software, and power electronics for large-scale energy storage systems.

Redwood said the expansion is driven by rising demand from data centers that require reliable, high-capacity power.

A recent $425 million Series E funding round, backed by Google and existing investor Nvidia, is helping scale the business.

Vice President of Business Development Claire McConnell said AI data centers face unprecedented challenges in connecting to power grids, with wait times often exceeding five years.

Energy storage systems are increasingly being used to bridge that gap and maintain operational continuity.

Founded in 2017 by former Tesla CTO JB Straubel, Redwood initially focused on battery recycling and materials production.

Its energy unit now repurposes used electric vehicle batteries to power customers such as Crusoe, with future projects expected to reach gigawatt-hour scale.

Source: TechCrunch