Energy-sucking AI data centers can look here for power instead

Artificial intelligence is advancing at a rapid pace, but so is the energy needed to power it. The growing demand for AI data centers has led to a surge in electricity consumption, putting a strain on the existing power grid. However, an innovative solution is emerging: repurposed electric vehicle (EV) batteries are being utilized to power AI data centers.

Redwood Materials, founded by Tesla co-founder JB Straubel, is at the forefront of this movement with their new venture, Redwood Energy. Instead of simply recycling old EV batteries, the company is giving them a second life by repurposing them for energy storage. These used battery packs are tested and rebuilt into modular storage systems that can efficiently power AI operations.

One notable project by Redwood Energy is the installation of a 12-megawatt, 63-megawatt-hour microgrid in Nevada, supporting a data center with 2,000 GPUs operated by Crusoe. This deployment is considered the largest active use of second-life EV batteries and has already proven to be more cost-effective than systems utilizing new batteries.

The benefits of using repurposed EV batteries for AI data centers are significant. By repurposing these batteries, companies are reducing waste and emissions by avoiding sending usable materials to landfills and cutting down on the need for new raw materials through mining. Additionally, second-life battery systems are more affordable than new lithium-ion options, making large-scale energy storage more accessible to AI developers and utilities.

Redwood Energy estimates that there will be over 100,000 retired electric vehicles in the United States this year, which translates to hundreds of gigawatt-hours in potential energy storage. The company has ambitious plans to develop over 1 gigawatt-hour of second-life battery capacity, with a goal of reaching 5 gigawatt-hours next year. They are also planning larger energy projects, including 100-megawatt sites, to meet the rising power demands of AI data centers.

Repurposing EV batteries for AI data centers is proving to be a sustainable solution for the industry’s energy needs. By repurposing these batteries, companies are not only reducing waste and emissions but also making energy storage more cost-effective and accessible. As more electric vehicles retire and the demand for AI continues to grow, we can expect to see more green-powered data centers powered by repurposed EV batteries in the future.