Redwood Materials has experienced significant growth in its energy storage business, emerging as the fastest-growing unit within the company’s portfolio. The surge in this sector is attributed to the ongoing expansion of AI data centers, as reported by TechCrunch.
Within a year, Redwood Materials transitioned from not having an energy storage division to witnessing remarkable expansion in this area. The company’s R&D lab in San Francisco has grown four-fold, now spanning 55,000 square feet and employing close to 100 individuals. This expansion aligns with the increasing demand for energy storage solutions driven by the rise of AI data centers.
The San Francisco facility, opened in April 2025, serves as the hub for developing integrated hardware, software, and power electronics for energy storage systems catering to data centers, AI computing, and various large-scale industrial applications.
In a recent announcement, Redwood Materials outlined plans for further expansion to meet the escalating demand for energy storage solutions in data centers. The company’s successful $425 million Series E funding round, with support from tech giants like Google and Nvidia, will fuel the growth of its energy storage business.
Claire McConnell, Vice President of Business Development at Redwood Materials, emphasized the critical role of AI data centers in driving the company’s focus on energy storage. Beyond data centers, Redwood’s energy storage systems are also poised to support renewable energy projects such as solar and wind initiatives.
This surge in demand for energy storage solutions underscores the evolving landscape of data centers, where the convergence of AI technologies necessitates reliable and scalable power supply infrastructure.
Source: TechCrunch