Google Invests in Tesla Co-Founder’s Redwood Materials to Power AI Data Centers

Alphabet’s Google leads a $425M Series E round in Redwood Materials, founded by Tesla co-founder JB Straubel, to scale energy storage solutions for surging AI data center demand as of January 28, 2026. Redwood, which previously raised $350M from Eclipse and Nvidia Ventures, will deploy capital to expand its Redwood Energy unit—launched June 2025—to build microgrids using repurposed EV batteries. BloombergNEF forecasts U.S. data centers will require 106GW by 2035, triple 2024 levels, straining the grid. The firm recycles 90% of North America’s lithium-ion batteries, extracting cobalt and nickel for resale. Now, it’s pivoting to retain some batteries for grid support, partnering with firms like Crusoe. “Storage is no longer optional—it’s critical infrastructure,” Redwood stated.