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Why would a car company be involved in supplying energy for the AI revolution?
This is exactly what’s happening with General Motors, one of the largest carmakers in the US.
In a move that blurs the lines between automaking and energy infrastructure, GM is entering the power business through a new agreement with Redwood Materials, a startup run by Tesla cofounder JB Straubel.
When GM electric vehicle batteries come to the end of their useful lives in cars, the company gives them a second life through a recycling deal with Redwood. The agreement includes new US-manufactured batteries from GM and second-life battery packs from GM electric vehicles.
These batteries will supply energy to AI data centers, GM and Redwood announced on Wednesday.
“The market for grid-scale batteries and backup power isn’t just expanding; it’s becoming essential infrastructure,” said Kurt Kelty, vice president of battery, propulsion, and sustainability at GM. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the US needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role.”
The joint effort, announced just weeks after Redwood launched its new energy storage arm, Redwood Energy, is already bearing fruit.
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GM EV batteries are helping power a new Redwood microgrid in Nevada, the largest second-life battery installation in the world, according to the startup. That system supports Crusoe, a company building AI data centers that demand massive, always-on power.
As AI data centers push electricity demand to new highs, the need for grid-scale energy storage has become urgent. What’s surprising is how auto batteries, originally designed to move cars, are now being tapped to stabilize the electric grid and enable the next wave of computing.
This collaboration also underscores a larger industrial trend: turning retired assets into strategic resources as global supply chains become stressed by geopolitical tensions and the threat of tariffs.
“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,” Straubel said in a statement.
More details are expected later this year, though one thing is already clear: the road from EVs to AI runs through power storage, and GM wants to be in the driver’s seat.
Sign up for BI’s Tech Memo newsletter here. Reach out to me via email at abarr@busienssinsider.com.
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