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

09 Jul 2025 By foxnews

Artificial intelligence is expanding quickly, and so is the energy required to run it. Modern AI data centers use much more electricity than traditional cloud servers. In many cases, the existing power grid cannot keep up. One innovative solution is gaining traction: repurposed EV batteries for AI data centers.

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Redwood Materials, created by Tesla co-founder JB Straubel, is addressing the energy needs of AI through a new venture called Redwood Energy. Instead of sending used electric vehicle batteries straight to recycling, the company gives them a second life.

The process begins by collecting and testing old EV battery packs. Many still retain over 50 percent of their original capacity. Once approved, these batteries are rebuilt into modular storage systems that can power AI operations.

One example is a 12-megawatt, 63-megawatt-hour microgrid now supporting a 2,000-GPU data center operated by Crusoe in Nevada. This project is considered the largest active deployment of second-life EV batteries. It already operates more affordably than systems built with new batteries.

The environmental and financial benefits are significant. By using repurposed EV batteries for AI data centers, companies avoid sending usable materials to landfills. This also cuts down on mining for new raw materials, which helps reduce carbon emissions.

Second-life battery systems typically cost less than brand-new lithium-ion options. That makes large-scale energy storage more accessible to AI developers and utilities. Since these batteries are already built and tested, they can be installed more quickly than waiting for new infrastructure.

Redwood Energy estimates that over 100,000 electric vehicles will be retired in the United States this year. That adds up to hundreds of gigawatt-hours in potential energy storage.

The company already has more than 1 gigawatt-hour of second-life battery capacity in its development pipeline. Its goal is to reach 5 gigawatt-hours next year.

Larger energy projects, including 100-megawatt sites, are also planned. Each one is designed to support the increasing power demands of AI data centers using repurposed batteries instead of new supply chains.

Repurposed EV batteries for AI data centers are proving to be a smart, sustainable solution for the industry's soaring energy demands. By bridging the gap between battery recovery and recycling, Redwood Energy is helping power the future of AI while reducing waste and emissions. As more EVs retire and AI continues to grow, expect to see even more green-powered data centers on the horizon.

Is repurposing EV batteries the missing link in building greener, smarter data centers, or just another temporary fix masking a bigger problem? Let us know by writing to us at Cyberguy.com/Contact.