Redwood Materials raises $350M to power AI data centers with US batteries

JB Straubel’s Redwood Materials has raised $350 million in Series E funding to expand its US-made battery storage systems and critical materials operations. The investment, led by Eclipse with participation from NVIDIA’s venture arm NVentures, positions the company to capitalize on surging demand from AI data centers and the clean energy transition as global supply chains tighten.

What you should know: Redwood is targeting the intersection of AI infrastructure needs and domestic energy security through battery storage solutions.

• The company launched Redwood Energy in June, which repurposes both new and used EV battery packs into energy storage systems for faster, more cost-effective deployment.
• In July, Redwood signed a non-binding memorandum of understanding with GM to convert new and second-life GM batteries into energy storage systems.

Why this matters: Battery storage is becoming critical infrastructure for AI data center expansion while addressing broader grid stability challenges.

• Redwood says large-scale battery storage is “the fastest and most scalable way to enable new AI data center rollout while unlocking stranded generation capacity and stabilizing the grid.”
• The approach also helps industrial facilities electrify operations and balance renewable energy output fluctuations.

The big picture: The US is racing to secure domestic production of critical battery materials as global supplies tighten.

• Redwood aims to reduce American dependence on imported Lithium Iron Phosphate batteries by delivering affordable, US-built energy storage systems.
• The company focuses on critical materials like lithium, nickel, cobalt, and copper for both grid-scale and industrial applications.

How they’ll use the funding: The $350 million will fuel multiple expansion areas across Redwood’s operations.

• Capital will go toward expanding energy storage deployments and refining and materials production capacity.
• The company also plans to grow its engineering and operations teams to support scaling efforts.

Who’s backing them: The oversubscribed round attracted strategic investors aligned with AI and clean energy trends.

• Eclipse led the Series E funding round, signaling strong investor confidence in the battery storage market.
• NVentures, NVIDIA’s venture capital arm, participated alongside other new strategic investors, highlighting the AI connection to energy infrastructure needs.