February 21, 2026 — San Francisco, CA — Redwood Materials, the battery recycling and materials startup founded by former Tesla CTO JB Straubel, is seeing rapid growth in its energy storage business, less than a year after launching the unit. The expansion reflects a surge in demand from AI data centers and other large-scale industrial applications.

The company’s San Francisco R&D lab has quadrupled in size to 55,000 square feet and now employs nearly 100 staff, focusing on integrating hardware, software, and power electronics for energy storage systems. While still small compared to Redwood’s 1,200-strong workforce and its Nevada facilities, the San Francisco lab has become central to its energy storage push, which officially launched in June 2025.

AI Drives Urgent Energy Needs

The expansion comes as AI advancements drive a data center construction boom, creating unprecedented demand for reliable electricity. “When data center developers try to connect to the grid, they’re often told it could take five-plus years, at the same time as there’s massive demand to build more data centers and compete in the AI race,”