Nvidia Backs Battery Recycler Redwood Materials in Major Energy Storage Push

Strategic Investment in Sustainable Energy

Nvidia, having recently reached a $4 trillion market capitalization, is expanding its investment portfolio through NVentures into unexpected sectors, according to reports. The latest beneficiary is Redwood Materials, a battery recycling company that just secured $350 million in new funding. This investment highlights a growing corporate focus on addressing energy constraints in artificial intelligence infrastructure.

Strategic Investment in Sustainable Energy
Beyond Recycling: Building U.S. Supply Chains
Solving AI’s Energy Bottleneck
Redwood’s Dual Business Model
Corporate Strategy and Market Impact

Beyond Recycling: Building U.S. Supply Chains

Founded in 2017, Redwood Materials initially aimed to create a domestic supply chain for critical metals like cobalt and lithium by recycling used electric vehicle batteries. Sources indicate the company has since expanded into energy storage, repurposing secondhand EV batteries to provide cost-effective power solutions for data centers—a key market for Nvidia’s energy-intensive hardware.

Solving AI’s Energy Bottleneck

Industry analysts suggest that power generation and storage have become significant challenges for AI development. Patrick Moorhead, CEO of Moor Insights & Strategy, noted, “Power generation, storage, and cost to drive those GPUs is increasingly becoming a bottleneck.” For Nvidia, backing companies like Redwood helps ensure that data centers—the primary users of its GPUs—can access scalable, affordable energy.

Redwood’s Dual Business Model

While widely known as a recycling giant processing approximately 90% of North America’s recycled lithium-ion batteries, Redwood’s energy storage division is gaining traction. Joe Fath of Eclipse Ventures, which led the funding round, stated that recycling is merely a “wedge” for the company’s broader ambitions. The report emphasizes that Redwood’s storage solutions could alleviate pressure on power grids strained by AI-related demand.

Corporate Strategy and Market Impact

Nvidia’s involvement in Redwood’s funding round aligns with its efforts to support enabling technologies for its core products. Although Nvidia declined to comment on the investment, analysts suggest such moves are strategic: by fostering energy storage innovations, Nvidia indirectly supports the ecosystem driving demand for its chips. This approach may help maintain the company’s rapid growth amid rising operational costs for AI infrastructure.

For further context, readers can explore details on Redwood Materials’ corporate history or Nvidia’s business operations.