Soaring Energy Demand from AI Data Centers See GM-Redwood Collaboration

CARSON CITY, Nev., July 17, 2025 — The unprecedented growth of AI data centers in the US has also seen this segment turn into a major energy consumption category.

Electricity demand in the country has been growing, largely driven by a vast requirement from AI data centers and the broader electrification wave.

AI data centers are set to triple their share of national electricity usage from 4.4 percent in 2023 to 12 percent by 2028.

The spurt in power consumption has also created an ever-growing need for energy storage systems, which can act to offset power outages and reinforce the grid when demand is high or supply is limited.

With an ambition to meet the energy demand of AI data centers, General Motors (GM) has signed a non-binding memorandum of understanding (MoU) with Redwood Materials to accelerate the deployment of advanced energy storage systems in the United States.

The energy storage systems will play a pivotal role in offsetting power outages and reinforcing the grid when demand is high or supply is limited.

Setting up robust energy storage systems will be achieved using both new US-manufactured batteries from GM and second-life battery packs from GM electric vehicles.

Leveraging Existing Collaboration

In a departure from limiting usage of GM’s advanced battery technology for only Electric Vehicles (EVs), the MoU also builds on GM and Redwood’s existing collaboration.

“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” said Kurt Kelty, VP of batteries, propulsion, and sustainability at GM.

“Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role. We’re not just making better cars – we’re shaping the future of energy resilience.”

Redwood Energy, a new business, was launched by Redwood Materials in June for creating a tangible deployment of EV packs and new modules into fast, low-cost energy-storage systems.

The objective of Redwood Energy is to meet the surging power demand from AI data centers and other applications.

The memorandum, announced on Thursday, enables Redwood to pair that integration expertise with both second-life GM EV packs and US-built batteries, delivering a domestic solution from cell to system.

Second-life and New EV Batteries

GM’s second-life electric vehicle batteries are already being repurposed to help power the largest second-life battery development in the world and the largest microgrid in North America, at Redwood’s 12MW/63MWh installation in Sparks, Nevada, supporting the AI infrastructure company Crusoe.

“Electricity demand is accelerating at an unprecedented pace, driven by AI and the rapid electrification of everything from transportation to industry,” said JB Straubel, founder and CEO of Redwood Materials.

“Both GM’s second-life EV batteries and new batteries can be deployed in Redwood’s energy storage systems, delivering fast, flexible power solutions and strengthening America’s energy and manufacturing independence.”

Going forward, GM and Redwood Materials expect to announce more details on their plans later this year.

GM-Redwood collaboration marks a significant step toward taking GM’s advanced battery technology beyond EVs and builds on GM and Redwood’s existing collaboration.

Inputs from Saqib Malik

Editing by David Ryder