Battery recycling startup Redwood Materials has completed a $350 million funding round that values the company at over $6 billion, with strategic participation from chipmaker Nvidia's venture arm highlighting the convergence of artificial intelligence and energy storage markets. The funding round, led by Eclipse Ventures, underscores growing investor confidence in companies positioned at the intersection of critical materials recovery and grid-scale energy infrastructure.

The company, founded by Tesla co-founder JB Straubel, has expanded beyond its original battery recycling operations to launch Redwood Energy, a grid storage business designed to address power bottlenecks constraining AI data center deployment. The energy storage division repurposes used batteries into large-scale installations that can store electricity during low-demand periods and release it when AI workloads require maximum power draw. This approach addresses a critical infrastructure constraint as hyperscale data centers multiply across North America.

Market analysts view Redwood's dual-business model as strategically advantageous in the current energy landscape. The company's ability to extract valuable metals like cobalt, nickel, and lithium from spent batteries while simultaneously deploying those materials in grid storage systems creates vertical integration opportunities that competitors struggle to replicate. Eclipse Ventures partner Joe Fath noted that the energy storage business generates revenue more quickly than traditional battery manufacturing, which requires substantial upfront capital investment before achieving profitability.

The strategic investment from Nvidia reflects the semiconductor giant's broader efforts to secure reliable power infrastructure for AI deployment. With data centers consuming increasing amounts of electricity and grid capacity becoming a limiting factor for AI expansion, companies across the technology sector are investing in energy storage solutions that can provide dispatchable power when renewable generation falls short. Industry experts expect this trend to accelerate as AI workloads continue growing and utilities face challenges upgrading transmission infrastructure.