This was meant to be the year that climate technology faded away.
Former President Donald Trump and the Republican Party have actively worked to dismantle key industrial and climate policies under the Biden administration. The European Union has also started to soften its most ambitious objectives.
However, as this year wraps up, the data offers a contrasting perspective on investments in climate and clean energy across the U.S. and Europe. Rather than collapsing, investment in this sector has remained fairly stable compared to 2024, according to CTVC, which is far from the downturn that some had anticipated.
This persistence can partly be attributed to the ongoing challenges posed by climate change. A more significant factor may be that many climate technologies have either become more affordable or superior to their fossil fuel counterparts—or are very close to doing so.
Remarkable cost declines in solar, wind, and batteries continue to propel climate tech forward. While not every emerging technology will experience the same trajectory, these developments suggest that fossil fuels are not infallible, and there are considerable opportunities to invest in companies offering cleaner, cost-effective alternatives.
Data centers continue to be at the forefront
Last year, I forecasted that 2025 would mark the year when climate tech embraced AI and its substantial appetite for energy, a prediction that has largely held true. It’s not entirely unexpected — for the climate tech sector, affordable, clean energy is essential.
Interest in data centers has surged over the last year. Investors surveyed by TechCrunch widely agree that data centers will continue to be a central topic in 2026.
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“They are establishing their own financial ecosystem, and the current AI initiatives are gaining enough traction that I don’t foresee the hyperscalers pulling back in 2026,” stated Tom Chi, founding partner at At One Ventures, to TechCrunch.
“I’m consistently hearing about a growing concentration of focus on data centers nearly every day in discussions, particularly with corporate clients,” remarked Po Bronson, managing director at SOSV’s IndieBio, to TechCrunch.
In 2025, the primary concern for data centers was acquiring new energy sources. However, Lisa Coca, partner at Toyota Ventures, believes their focus will shift in 2026. “The conversation around energy for data centers in 2026 is likely to transition from demand to resilience and the necessity to expedite plans to become independent from the grid,” she stated. Independence could help address certain issues faced by data centers, especially resistance from grid operators and the public who are increasingly anxious that new energy demands are driving up their electricity costs.
Nevertheless, the need for additional power persists, and investors noted that geothermal, nuclear, solar, and batteries have all benefited from the surge in interest. “Zero-carbon generation is already among the most affordable energy sources, and the increasing demand for both grid-scale and distributed batteries is speeding up cost reductions more rapidly than anticipated,” mentioned Daniel Goldman, managing partner at Clean Energy Ventures.
Investors acknowledged the possibility of an AI bubble bursting; some expressed doubts about whether such an event would adversely affect the energy sector.
“Could a bubble burst in 2026? Absolutely,” stated Kyle Teamey, managing partner at RA Capital Planetary Health. However, he noted that it is unlikely to disrupt infrastructure plans. “The budget for 2026 has already been allocated. The momentum is in motion.”
Andrew Beebe, managing director at Obvious Ventures, suggested that while the data center bubble may burst around 2026 or early 2027, he does not believe any such bubble exists in electricity generation. “We still require a substantial amount of power, and we’ll utilize it — no build-out bubble in that sector… yet.”
Beyond AI and data centers, Anil Achyuta, partner at Energy Impact Partners, noted that reindustrialization will come into sharper focus this year. “We need to reconstruct supply chains for systems requiring multiple components and complex processing flows,” he said, highlighting robotics, batteries, and power electronics as key areas.
The ongoing pursuit of energy
Thanks to a continuous stream of new data center announcements, energy-focused startups have received a boost this year, particularly those involved in nuclear fission. In recent weeks, nuclear startups have reported funding rounds exceeding $1 billion, raising speculation that many will pursue SPAC or traditional IPO processes in 2026.
“Nuclear is very much in vogue at present,” remarked Teamey.
However, it will take time for nuclear energy to make a significant impact on electricity demand. In the interim, technology firms and data center developers have been turning to solar and batteries as cost-effective, rapidly implementable energy sources. Grid-scale batteries, in particular, have seen record deployments in 2025. With the emergence of alternative battery chemistries such as sodium-ion and zinc, costs are expected to fall further, promoting widespread adoption.
“We expect to see growth in 2026 with new innovations in [battery] chemistry and business models,” stated Leo Banchik, director at Voyager. “A significant lesson from past mishaps was the need to develop gigafactories after validating demand or achieving superior unit economics compared to existing models. The current wave is more disciplined.”
Several investors are optimistic about geothermal stepping up to fill impending gaps in the coming years. They view enhanced geothermal as a relatively advanced technology poised for large-scale deployment in 2026.
“Geothermal will closely follow solar in terms of new generation,” stated Joshua Posamentier, managing partner at Congruent Ventures. “Natural gas assets are expanding at a steady pace. There isn’t much new capacity in turbine manufacturing coming online, and they are fully utilizing what they can. Geothermal is poised for exponential growth.”
While AI is driving demand, innovations and businesses that venture beyond data centers are expected to gain the most, according to Laurie Menoud, founding partner at At One Ventures. “Data centers are one component of the demand, not the entirety of the market.”
Which startup is poised for a public offering in 2026?
Not everyone concurred or was willing to offer a prediction. However, among those who did, many highlighted nuclear or geothermal startups as likely candidates for going public, whether via IPO or SPAC.
The startup most frequently mentioned was Fervo, the enhanced geothermal company that recently secured a $462 million funding round. The firm is widely considered a frontrunner in the industry and is currently constructing a 500-megawatt facility in Utah that is expected to serve as a blueprint for forthcoming power plants. Accessing the public markets would enable the company to bolster its resources for additional projects.
Trends to monitor
Apart from data centers, investors are keen on a variety of technologies and sectors, including essential minerals, robotics, and software designed to manage the electricity grid.
“We need to focus more on grid execution as a vital category,” said Amy Duffuor, general partner at Azolla Ventures. “The hidden successes are companies that produce software, hardware, and supply-chain solutions to expedite interconnection, planning, and deployment, helping utilities progress on projects.”
Resilience and adaptation will be key themes in 2026, according to Coca of Toyota Ventures and Posamentier of Congruent Ventures. Achyuta at EIP identified a potential application: systems that enable robots to bury electrical transmission lines more swiftly and cost-effectively than humans, thereby reducing wildfire risks and enhancing the grid’s reliability.
Beebe, at Obvious Ventures, noted that electric trucking will also be a space to watch. “One of the major developments of 2026 will be Tesla Semi’s releases and specifications. The range and pricing of that vehicle will transform the industry in ways comparable to the Model S or 3.”
AI is likely to play a significant role in transforming climate tech. “We anticipate substantial innovation when AI interacts with the physical world in 2026, affecting both infrastructure and consumer applications,” stated Matt Rogers, founder at Incite and Mill. “The integration of AI with smart hardware and physical infrastructure will catalyze the transformation of trillion-dollar industries from manufacturing to life sciences to food systems.”
Moreover, keeping an eye on technologies that have previously been deemed impractical could be beneficial, remarked Bronson at SOSV. “When investors eventually grow weary of a sector and conclude that it is unlikely to yield returns, that’s precisely when true breakthroughs occur,” he commented.
Explore further
Below are the detailed remarks from the investors who participated in TechCrunch’s survey, listed alphabetically. Click the link to jump to a specific response.
- Anil Achyuta, partner at Energy Impact Partner
- Leo Banchik, director at Voyager
- Andrew Beebe, managing director at Obvious Ventures
- Po Bronson, managing director at SOSV’s IndieBio
- Tom Chi, founding partner at At One Ventures
- Lisa Coca, partner at Toyota Ventures
- Amy Duffuor, general partner at Azolla Ventures
- Daniel Goldman, managing partner at Clean Energy Ventures
- Laurie Menoud, founding partner at At One Ventures
- Joshua Posamentier, managing partner at Congruent Ventures
- Matt Rogers, founder at Incite and Mill
- Kyle Teamey, managing partner at RA Capital Planetary Health
Anil Achyuta, partner at Energy Impact Partner
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
Reindustrialization beyond data centers will emerge as a significant theme. We need to restore supply chains for systems that entail multiple components and intricate flowsheets. For instance, advancing next-generation robotics to tackle labor shortages and national security challenges will necessitate integrated supply chains. Technologies like batteries, power electronics, fuel cells, gas turbines, and even home manufacturing are examples of markets/technologies that will need reinvention within the value chain.
Another area to watch is AI-powered physical science. While companies like Zanskar (predictive AI for geothermal) and Fabric8Labs (generative cooling for data centers) have demonstrated promise, there haven’t been many visible breakthroughs yet. Nonetheless, the talent pool addressing these challenges is impressive and could lead to exciting advances.
Where is the largest opportunity to find or place power on the grid?
Gas turbines deliver reliable capacity and remain a choice for many major players deploying data centers. Beyond that, batteries—especially sodium-ion—represent one of the most economical, near-term solutions at the grid scale. I am optimistic about the progress in this technology, and pairing solar with batteries (as firms like Peak Energy are doing) remains an attractive strategy. Next-gen geothermal also shows significant promise, but the timelines are akin to those of nuclear energy—powerful yet taking about a decade to reach full capacity.
Additionally, algorithmic solutions that unlock new power using existing infrastructure (e.g., Gridcare, ThinkLabs AI) and optimize workloads (e.g., Emerald AI) can enhance grid efficiency. Innovations such as applying optical coatings to transmission lines to minimize losses, are being developed by AssetCool (a company within the EIP portfolio).
Which climate tech or clean energy startup is most likely to IPO in 2026?
Fervo Energy, Commonwealth Fusion, and Redwood Materials would be my personal guesses, though I may be mistaken.
Which technologies do you believe will be ready for larger-scale deployment in 2026?
Sodium-ion batteries for grid-scale storage are already in deployment and will see rapid acceleration in 2026. Another technology to keep an eye on is solid-state transformers (note that Heron Power is a part of the EIP portfolio). The industry is progressing more swiftly than expected and is scaling similarly to semiconductors, though full-scale production may require more time.
What trend or technology should we focus on more?
One emerging trend is the underground construction of transmission lines. Advances in robotics could facilitate a quick, cost-effective approach that greatly diminishes wildfire risks, thus mitigating the substantial carbon emissions connected to such incidents.
Distributed power, warmth, and computation are the final category of trends we are tracking with interest for 2026.
Leo Banchik, director at Voyager
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
Data centers will persist in driving record energy consumption as AI workloads expand. Despite concerns about overbuilding, it’s unlikely there will be significant stranded capacity — as computing power becomes less expensive and more accessible, we will continue to uncover new applications for it. An intriguing shift is seen in hyperscalers who are starting to distinguish between clean energy sources – robust versus intermittent, location, and scalability – instead of merely considering megawatt-hours. This is already emerging in customized offtake agreements and on-site supply strategies.
Fission and geothermal are expected to maintain momentum fueled by both private investments and federal support. As geopolitical tensions rise, fusion may also gain traction for increased federal backing, although significant deployment on a high-capacity grid level is still years away.
Alternatives to natural gas peakers will likely gain momentum too—employing newer turbines and modular designs, coupled with integrated carbon capture, as grids manage increased peak demands from AI.
Where is the greatest opportunity to find or place power on the grid?
The expansion of solar and batteries will continue, given their strong economics. For persistent, dispatchable baseload power, we anticipate expansion in fission, geothermal, and peaker alternatives, like modular gas turbines with carbon capture. Additionally, there’s a grid-edge opportunity worth monitoring: significant facilities acquiring dedicated baseload on-site rather than adding to grid congestion.
Which climate tech or clean energy startup is most likely to IPO in 2026?
Most likely in fission or geothermal. These firms have secured substantial capital and negotiated robust offtake agreements with hyperscalers and utilities. With multibillion-dollar project pipelines requiring ongoing growth financing, several could venture into public markets in 2026.
Which technologies do you think will be prepared for larger scale deployments in 2026?
The deployment of energy storage is speeding up across residential, commercial, industrial (including backup for data centers), and grid-scale applications. Domestic supply chains, encompassing second-life battery systems, are gaining traction for stationary storage. Anticipate growth in 2026 with new approaches regarding chemistry and business models. A critical lesson learned from previous setbacks was the urgency of scaling gigafactories post demand proof or when achieving better unit economics than conventional models. The emerging wave is more disciplined.
Industrial heat pumps and thermal storage solutions for steam and process heat are becoming less expensive to operate than gas boilers in numerous regions and applications, especially where waste heat is available and electricity rates are favorable.
We’ll also see substantial expansion in critical minerals and battery materials initiatives — lithium, rare earths, magnesium refinement; battery component and cell manufacturing; copper recycling — emerging with federal support as supply chain security turns strategic.
What trend or technology should we pay more attention to?
Software and AI enhancing physical infrastructure: real-time factory intelligence to improve energy efficiency and production yields, AI-based design tools that expedite product development cycles, grid management software coordinating intermittent renewables with storage and dispatchable power.
Companies adopting a clean-slate strategy to reimagine foundational technologies — think a SpaceX-style reevaluation of components once thought to be resolved issues. Developing motor designs that eliminate reliance on rare earths, modern manufacturing techniques for grid infrastructure like transformers, advanced materials processing that significantly reduces costs while enhancing quality. Advances in robotics further support these cost trajectories, making U.S. manufacturing competitive again.
Finally, dual-use climate technologies with superior unit economics that inadvertently strengthen domestic supply chains. Defense and industrial policy continue to back these not merely for climate-related reasons but because they present cost advantages and ensure supply security.
Andrew Beebe, managing director at Obvious Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
Data centers will once again take precedence. There will, however, be heightened discussions about a potential build-out bubble (focused on data centers, not electricity generation). We’ll grapple with the dual reality of excessive funds/debt allocated to data centers, and the speculation bubble will likely burst (possibly early 2027). Concurrently, we will still necessitate substantial power, which will be utilized — no build-out bubble in that sector… yet.
Where is the largest opportunity to locate or place power on the grid?
In terms of power generation: geothermal in the near term. Fission in the mid-term. Fusion in the long-term, over ten years. Regarding siting: The aforementioned technologies can be deployed anywhere, but primarily in western states for geothermal electricity. For batteries—PJM [the grid covering the mid-Atlantic west to parts of Illinois] and Texas.
Which climate tech or clean energy startup is likely to IPO in 2026?
Fervo is among the promising candidates from venture backing.
Which technologies do you believe will be ready for larger-scale deployment in 2026?
Geothermal and grid-scale batteries.
What trend or technology should we focus on more?
Grid software and electric vehicle trucking. A key highlight of 2026 will likely be Tesla Semi’s specifications and release. The range and pricing of this vehicle will significantly reshape the industry, reminiscent of the impacts made by the Model S or 3.
Po Bronson, managing director at SOSV’s IndieBio
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
I still observe an ever-growing concentration of effort and emphasis on data centers nearly every single day during meetings, particularly with corporates. This is somewhat driven by “picks and shovels” companies who are strategizing how to become more significant players/integrated instead of merely being a purchased component.
A related term I encounter more often is power density and/or specific power (power-to-weight ratio), as many corporates anticipate or plan a transition of their energy divisions into robotics. Duncan Turner is our resident expert on this topic.
Which climate tech or clean energy startup is most likely to IPO in 2026?
I don’t have a climate tech company in my portfolio lined up for public offerings in 2026. Tidal Vision has targeted 2027. That’s my closest prediction. I prefer not to speculate on other VC portfolios, even though I have my opinions, as I shouldn’t express views where I’m only partially informed.
Which technologies do you think will be ready for larger-scale deployment in 2026?
For 2026, my fastest-scaling companies include Tidal Vision and Voyage Foods, which has taken over a General Motors facility in Ohio.
What trend or technology should we pay more attention to?
Regarding what to monitor more closely, I’ll repeat Duncan’s accomplishments — his initiatives with the Plasma Forge are, in my opinion, going to be highly compelling and will ensure rigorous study in the field.
Additionally, I consistently feel that real breakthroughs often occur when investors grow weary of a sector and conclude that it’s unlikely to thrive. I recall this lesson from 1999 when there was speculation about whether the search market would be dominated by Yahoo, AltaVista, Excite, Lycos, or Infoseek.
I sense this trend in my personal investments. I recently conveyed this sentiment to AgFunder; however, the VC landscape seems to exhibit a bias that anticipates multiple winners in sectors projected for growth. In reality, most markets don’t accommodate multiple winners, and a single company emerges victorious.
Tom Chi, founding partner at At One Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
Expect significantly more discussion surrounding data centers in 2026. They are crafting their own financial ecosystem, and the current momentum in AI initiatives suggests that I do not foresee hyperscalers retracting in 2026.
Where is the biggest opportunity to find or place power on the grid?
Budgets for hyperscalers range from $50 billion to $100 billion, covering power, chips, and more. The costs associated with chips are substantial enough that stakeholders are willing to allocate additional funds to secure power on the grid sooner, as the losses from chip depreciation exceed most incremental additions to their power expansion budgets.
Which climate tech or clean energy startup is most likely to IPO in 2026?
The IPO market remains a bit vague, and most individuals don’t reveal the timing of their public offerings.
Which technologies do you think will be prepared for larger-scale deployment in 2026?
Companies like Fervo are at an interesting pivotal moment. One of our portfolio companies, Provectus Algae, is also at a crucial juncture.
What trend or technology should we prioritize more?
We’ve observed a significant swing away from heavily capital-intensive endeavors in industrial decarbonization not tied to AI. It is essential for our collective future, notwithstanding its temporary period of diminished visibility.
Lisa Coca, partner at Toyota Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
From Toyota Ventures’ perspective, we believe that the energy dialogue around data centers in 2026 will transition from demand to resilience, emphasizing the urgency to advance plans for grid independence.
Where is the biggest opportunity to find or place power on the grid?
We are convinced that the most promising investment opportunities lie in firm, dispatchable, and scalable carbon-free energy solutions. We have actively committed to technologies enhancing baseload power, such as geothermal and nuclear, through our portfolio companies like Rodatherm and Natura Resources. For essential grid flexibility, we are investing in advanced, long-duration energy storage battery technologies with our backing of e-Zinc.
Which climate tech or clean energy startup is most likely to go public in 2026?
We foresee nuclear power leading in terms of IPOs and SPACs during 2026.
Which technologies do you think will be ready to deploy at larger scales in 2026?
This is a challenging question since the outcome may hinge on the evolution of the capital stack. A substantial number of climate tech companies across various sectors are on the brink of larger-scale deployment. The key challenge lies in securing financing for first-of-a-kind (FOAK) projects to mitigate risks in the crucial step of transitioning from initial prototypes to scalable implementations.
What trend or technology should we focus on more?
Our team anticipates that resilience and adaptation will continue to be prominent in 2026. The Toyota Ventures portfolio exemplifies this: BurnBot focuses on wildfire mitigation, ZymoChem enhances supply chain resilience through sustainable materials, and Alora creates adaptable resource solutions.
Amy Duffuor, general partner at Azolla Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
I predict that the energy discourse will shift from power generation to the speed of power delivery. Interconnection timelines, permitting, and physical grid constraints remain bottlenecks, leading data centers to increasingly rely on hybrid strategies combining grid power, storage, and demand flexibility to meet timelines.
Where is the biggest opportunity to find or place power on the grid?
One opportunity lies in grid-ready locations, such as sites with existing transmission and substations. Anything that shortens interconnection timelines currently holds immense value due to limited access to the grid. I am also interested in wireless power transmission, despite its nascent stage.
Which climate tech or clean energy startup is most likely to IPO in 2026?
Fervo Energy has generated considerable talk recently…!
Which technologies do you think will be ready for larger-scale deployment in 2026?
Long-duration energy storage technology companies are set to progress from initial pilots to demonstrations and subsequently to repeatable deployments. We’re particularly enthusiastic about our portfolio company Noon Energy.
What trend or technology should we emphasize more?
Grid execution should gain more prominence as a category. The unnoticed victors are firms that produce software, hardware, and supply-chain solutions that expedite interconnection, planning, and deployment, empowering utilities to effectively advance projects.
Daniel Goldman, managing partner at Clean Energy Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
We anticipate an uptick in deal-making within the data center/hyperscaler sector that encompasses the following aspects:
- Organized power off-take agreements that combine behind-the-meter and utility-related infrastructure to enhance pricing and reliability;
- More actions at federal, ISO/RTO, and state levels to expedite the deployment of energy assets while balancing tariff structures to avoid imposing increased costs on voters;
- Mergers and Acquisitions focused on technology optimization, inclusive of resources such as geothermal, nuclear, critical minerals, and downstream hardware and software products that facilitate the digitalization, decarbonization, and distribution of energy resources and load management, a focal area for our firm and venture capital at large.
While we do not predict an overall “bust cycle” for data center and hyperscaler development activities, we foresee some rationalization in development and the implementation of efficiency options to reduce capacity needs.
Where is the largest opportunity to find or place power on the grid?
The most significant immediate opportunity — and challenge — lies in enhancing the grid itself. Modernizing the grid through digital platforms, decarbonization, and decentralization will unlock cost efficiencies, optimize existing infrastructure, and better integrate large-scale distributed energy resources — likely not groundbreaking information here. Zero-carbon generation is already among the most economical energy sources, and the rising demand for both grid-scale and distributed batteries is catalyzing cost reductions more rapidly than expected.
We foresee this trend persisting despite recent policy shifts evident in the IRA, as numerous venture capital-supported companies have the potential to make a significant impact on the grid as they expand and gain market adoption. The disruption is underway!
Which climate tech or clean energy startup is most likely to IPO in 2026?
Factorial appears to be a leading candidate following its plans to de-SPAC in 2026. Its trajectory indicates that companies with solid customer traction in expansive markets, clear cost and performance benefits, and fast-growing revenues are well-positioned for public offerings. (This SPAC market contrasts sharply with that of 2020, where entrants such as QuantumScape lacked significant revenues and may not have been adequately prepared for public markets.)
Beware of an increase in companies rushing to public markets on hype rather than solid fundamentals.
Beyond Factorial, several companies in energy storage, generation, and critical mineral sectors are nearing scalable revenue heights to facilitate access to low-cost public market capital (a genuine advantage); however, in the minerals sector, we may see a surge in mergers and acquisitions preceding any public offerings in 2026.
Which technologies do you think will be ready to deploy at larger scales in 2026?
Projects in energy storage, sustainable aviation fuel (SAF), critical minerals, and manufacturing facilities throughout the energy supply chain will attract significant investments in the U.S., supported by manufacturing tax incentives and attractive market prospects, despite potential federal policy challenges.
In 2025, we thoroughly examined and developed new risk transfer solutions for FOAK project developers. We foresee commercial lenders and private credit beginning to engage significantly in this domain with support from insurance underwriting and catalytic capital. There’s an expectation of a rise in projects and debt financing to back early-stage commercialization, which historically has only trickled in. This is a crucial enabler of the broader scale necessary across the industry.
What trend or technology should we keep a close eye on?
For western markets to be competitive against China’s manufacturing and innovation capabilities, financial innovation is CRUCIAL. Global markets must deploy an estimated $3 trillion to $9 trillion annually through 2050 on climate-related technologies and project implementations if we aim to mitigate global temperature increases and compete internationally in these arenas. Climate-related investment globally reached only $2 trillion in 2024 and is on a trajectory to match that figure in 2025.
To boost the deployment rate, we must persuade public and private investors that the risk-return profile is favorable enough to deploy capital across the climate capital stack — this includes early-stage ventures, growth-stage ventures, private equity, commercial lending, and private credit, together with infrastructure. Presently, our sector is not drawing enough capital; simply put, risk levels need to diminish or returns need to increase.
There are opportunities for employing risk-sharing strategies to optimize capital structures and lower the financing costs for new technology initiatives, which will also accelerate their descent along the cost curve. Viable solutions include technology and performance risk insurance, surety bonds to handle construction risks, pooling offtake agreements among buyer groups (e.g., hyperscalers for clean power or airlines for SAF), knobby financing gaps in construction, and beyond. Clean Energy Ventures has spent time in 2025 identifying new risk transfer solutions, collaborating closely with our colleagues in finance and insurance sectors. We believe 2026 will witness more innovative financing frameworks facilitating the swifter scaling of climate technologies.
Attention should also shift to cost trends. The impact of AI is emerging but not gaining widespread recognition within climate technology. Within larger corporations and smaller startups, AI is driving cost reductions, prompting quicker innovation in complex facilities and supply chains. This trend is visible across chemicals, mining and refinement, power generation and grid optimization, and manufacturing (steel, cement), recycling, and waste management, among others.
We are still in the early phases of witnessing AI’s effect on cost curves across diverse commodities and sectors. As we discuss the upward influence of power prices driven by AI infrastructure needs, it’s essential to remember that AI will concurrently remodel industries worldwide and lower production costs.
Laurie Menoud, At One Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
There’s undeniably been substantial enthusiasm around everything associated with data centers, energy production, storage, transmission, and cooling. However, from a venture capital standpoint, constructing and scaling data centers does not align with startup timelines. It’s a prolonged struggle involving permits, substations, and grid enhancements. To quantify it, hyperscale data centers currently require about three to six years to obtain permits and connect in the U.S. In some contexts, interconnection alone can extend beyond five to seven years. Therefore, in 2026, I expect to observe sustained progress for energy companies not only linked to data centers but capable of expanding into commercial and industrial applications and front-of-the-meter initiatives. Data centers represent one demand influencer, not the entirety of the market.
Additionally related is the supply of essential metals, which I remain highly focused on: mining, extraction, refinement, and recycling. This is critical not only for data centers (particularly copper) but also for EV batteries, which rely on materials such as lithium, nickel, manganese, and cobalt.
Where is the most significant opportunity to discover or place power on the grid?
In regions where thermal (coal and gas) and nuclear facilities are retiring since these locations already possess strong grid connections. Rapidly deploying new clean energy generation at these sites could significantly hasten project timelines. In the U.S. alone, over 60 GW of coal capacity has been retired since 2015, with an additional 40+ GW scheduled for retirement by 2030. Each of these retirements frees up a transmission node that took decades to establish. Harnessing or reusing existing interconnection can often be the deciding factor in establishing whether a project timeline is two years versus eight years. This would facilitate the installation of next-gen nuclear facilities like Stellaria, which reduces long-lived waste, lower capital expense, operational costs, minimizes deployment time, and extends fuel usage, or geothermal solutions like Factor2 Energy, utilizing underground CO2 reservoirs to lessen deployment location constraints.
The same principle applies to industrial sites (chemicals, steel, refineries) that have existing oversized grid connections. These sites are endeavoring to increase production and add storage, achieving a significant challenge: interconnection. If rapid electrification of heavy industries is the goal, focus should be on areas where the grid already exists.
Which climate tech or clean energy startup is most likely to IPO in 2026?
While none can be definitively known, I would closely watch the battery recycling and circular supply chain for critical materials sector. The prices of lithium, nickel, and cobalt are incredibly sensitive to geopolitical forces, and recycling offers a lower-risk, domestic supply for the U.S.
Which technologies do you believe will be ready for larger-scale deployment in 2026?
Relectrify is gearing up to deploy their battery systems at commercial production scales in 2026, targeting a cumulative capacity of 100 MWh. Their strategy uses semiconductor circuitry at the cell-level to control battery cells individually at high frequency, generating a direct alternating current waveform without requiring an inverter anymore, which presents clear wins in CAPEX, enhanced battery lifespan, and lower OPEX through precise identification and replacement of malfunctioning cells. This process is already underway.
Additionally, grid-scale energy storage beyond lithium is essential, driven by both AI data centers and renewable advancements. Without significant storage, maintaining 24/7 clean energy beyond nuclear and hydro is unfeasible. Globally, stationary storage is projected to escalate from approximately 45 GWh in 2023 to hundreds of GWs by 2030. Some of the cutting-edge technologies are already prepared today.
Battery recycling and circular supply chains with automotive manufacturers (recycled lithium, nickel, cobalt, and copper returning for new batteries) are progressing and liquidating into larger scales as well. The year 2026 will undoubtedly emphasize acceleration. Ascend Elements has already constructed North America’s largest lithium-ion battery recycling facility, achieving the first production of recycled lithium carbonate. Presently, most of the U.S. supply of lithium carbonate is imported, primarily from Argentina and Chile. Securing metal supply with lower-cost recycled content represents a considerable advantage.
What trend or technology should we pay additional attention to?
Firms such as Chemfinity, which have the potential to position domestic metal refining on par with China, are noteworthy, as is anything connected to mining, extraction, refinement, and recycling of essential metals for data centers and electric vehicles. Copper is THE metal for data centers, utilized in power cables, busbars, transformers, and cooling loops. A single gigawatt of data center capacity requires tens of thousands of tonnes of copper. Approximately 40% to 45% of the world’s copper refining occurs in China, followed by Chile, mirroring the geographic distribution seen in lithium refining and precursor battery chemistry. Conversations around energy security should focus on this reality.
Joshua Posamentier, managing partner at Congruent Ventures
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
The push for growth will persist, but the focus will shift from dramatic gigawatt announcements to construction, commissioning, and grappling with the harsh realities of interconnect delays and permitting challenges. Consequently, there will be a significant emergence of “bring your own generation” and “demand flexibility.”
The era of Application Specific Standard Products (ASSPs)/Application Specific Integrated Circuits (ASICs) for AI data centers will commence earnestly. Although GPU demand will continue to grow, this pace is expected to slow in favor of more specialized chips that exhibit far better efficiency, particularly for inference tasks. This shift will progressively decouple data center electricity consumption from token generation.
The unit economics of the leading foundational AI firms will leak, revealing unfavorable indicators. Nevertheless, these sectors will likely convince investors to support them until they achieve positive unit economics, a breakthrough that will materialize sooner than anticipated. However, the allure will wane; these firms will be classified differently from the high-margin SaaS companies from earlier market cycles.
Data centers will enhance their roles as grid participants through adaptability, load management, and power quality, thanks to technology adoption leading to much faster interconnect times compared to other large energy loads — the more technology they embrace, the quicker they will be connected.
In 2026, we will likely witness the first off-grid, world-scale data center notice to proceed (NTP) [a letter instructing a contractor to commence work]. At the same time, expect stronger NIMBY (Not In My Back Yard) resistance to nearby data centers due to a myriad of concerns ranging from energy expenses to size and water usage.
Where is the biggest opportunity to find or place power on the grid?
Nuclear fusion! I anticipate that we will observe the first net gain analysis (i.e., deuterium fusion where it would be Q>1 if it were tritium) within a startup reactor.
Geothermal will be closely following solar in terms of new generation to increase gas asset deployments.
Which climate tech or clean energy startup is most likely to IPO in 2026?
Whether through SPACs or IPOs? Numerous opportunities lie ahead.
What technologies do you think will be ready to deploy at larger scales in 2026?
Geothermal technologies for electricity and district heating. The friction associated with scaling single-site geothermal heat loops still remains too significant to see rapid enhancements beyond current levels. However, thermal energy storage for load management in industrial environments will gain attraction.
What trend or technology should we be paying more attention to?
Robotics (excluding humanoid types) are taking over numerous labor-intensive sectors; they will significantly influence various industries such as manufacturing, agriculture, waste management, and more in 2026.
Logistics and manufacturing efficiency are also in the spotlight: electrification, efficiency enhancements, onshoring, and AI are exerting pressure on emissions across approximately half of the economy, primarily driven by economic, rather than purely impact, motivations. While providing them enduring clarity on lower costs compared to conventional fuels would entice buyers, it pertains to everything from electrified autonomous trucking to electric autonomous rail and hidden terminals.
The demand for resilience technology is set to accelerate significantly. Insurance costs stemming from climate risk are escalating faster than any other expenditures for homeowners, which will also affect commercial enterprises. Businesses and individuals will actively begin investing in resilience, confronting intensifying climate change and extreme weather events, as well as the aging infrastructure and the transition from a centralized to a decentralized resource paradigm.
Matt Rogers, founder at Incite and Mill
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
Data centers will function as pivotal factories for the next wave of AI innovation, driving America’s societal and economic landscape. I envision that local governments will assume a more active role in 2026, challenging hyperscalers to deliver solutions aligned with community needs, facilitating municipal partnerships that enable quicker construction. Energy affordability is a pressing concern, and reversing the trend of rising costs from 2025 is vital.
Where is the largest opportunity to discover or locate power on the grid?
The initiative for decentralized infrastructure solutions, including rooftop solar, energy storage, and distributed energy resources like heat pumps and smart thermostats, originates from within households in 2026. These options are accessible today and can be swiftly activated in a cost-effective manner, culminating in minimal disruption to grids throughout the nation. The permitting process is quicker than constructing new centralized power plants.
Should sufficient individuals adopt these readily available solutions, America’s grid could better manage the increased capacity from the expansion of data center AI.
Furthermore, there’s a unique opportunity for collaboration: AI innovators and major tech firms seek a quicker, more reliable route for development. Meanwhile, local and state governments are interested in affordability, economic investments, and resilience. This collaborative effort puts communities in a powerful position to negotiate swift permitting and adaptable construction timelines for private-sector-fueled economic revitalization, tax income, and job creation.
By empowering households with efficient tools to reduce utility expenses, hyperscalers will find it easier to access the power required to run AI data centers, resulting in significantly quicker responses. This endeavor is not abstract; rather, it is tangible and practical.
Which technologies do you think will be ready for larger-scale deployment in 2026?
Mill. We plan to implement more Food Recyclers, and at a larger scale than ever before. We are strategizing additional partnerships to persuade more households, businesses, and communities to perceive food as a resource that ought to return to the food system rather than being discarded for weeks in dumpsters or linger for years in landfills.
Robotics will attract considerable funding and private sector interest in 2026. Simultaneously, builders will steer away from hype surrounding humanoid models, moving towards practical robots tailored for specific tasks, thereby improving life quality. The robotics landscape will focus more on functions akin to Roomba than relatable human companions, benefitting from advancements in both affordability and technology risk management.
What trend or technology should we concentrate more on?
In 2026, expect to see significant innovation where AI intersects with the physical world, impacting both infrastructure and consumer application layers. Merging AI with intelligent hardware and physical infrastructure will facilitate the transformation of trillion-dollar sectors, spanning manufacturing to life sciences to food systems. For AI to prop up the future without overwhelming grids or negatively affecting communities, it must be integrated with tangible hardware that addresses challenges and enhances everyday life. The benefits will extend to both AI-driven smartphones and AI-optimized waste facilities.
Kyle Teamey, managing partner at RA Capital Planetary Health
Data centers have dominated conversations about energy in 2025. What should we expect in 2026?
I anticipate that data centers will still hold prominence in 2026. However, my perspective is slightly colored by past experiences from the previous AI cycle—it feels reminiscent of similar conversations. Yet, the scale of investment is remarkably greater. The amount of attention devoted to it is exponentially more significant. Therefore, the resolution of this situation may take considerable time to unfold.
The expenditure allocated for 2026 has already been earmarked. The momentum has begun. Could a bubble burst in 2026? Certainly. Yet, such repercussions may take time to materialize. It could require several months up to a year to truly manifest. It is a formidable task to halt momentum mid-course and attempt to retrieve funds.
Where is the most substantial opportunity to find or place power on the grid?
There has been considerable discourse on this topic, yet the demands related to data and its requirements grow at an exponential rate. In contrast, the power scale increases in a linear fashion. As a result, it may take an extended period for the physical infrastructure to keep pace with the mounting data demands. The possibilities are quite vast — whether it pertains to advancements in power generation, storage, transmission, or distribution; improving grid functionality encompasses an extensive list.
Given the current bull market in electricity, it’s challenging to determine how long this phenomenon has persisted—possibly for about a century? In our assessment, the opportunities abound across various areas. Recent months have seen some entities going public, and it is fair to predict an uptick in this trend.
Which climate tech or clean energy startup is poised for a public offering in 2026?
I foresee a noticeable increase in public companies emerging from the power generation domain in 2026, and this could encompass a wide range of players. Nuclear energy is notably gaining traction currently, and we can likely expect an influx of such companies. Geothermal energy also stands a good chance, and numerous intriguing firms engaged in project development and execution could potentially pursue public status as well. It’s not solely technology firms; rather, those involved throughout the supply chain may also come to the forefront.
Which technologies do you believe will be set for larger-scale deployment in 2026?
Particularly nuclear fission companies have considerable potential for growth. While this may represent a bubble, there is a chance that if certain companies find success in bringing their projects to fruition, it could lead to increased capital inflow to facilitate further rapid expansion.
What trend or technology should we be monitoring closely?
No groundbreaking technologies have surfaced recently that I view as game-changers deserving universal attention. Presently, the emphasis revolves more around scaling many of these technologies. Achieving rapid scale presents a remarkable opportunity.
The various trends are driven not solely by manufacturing demand but also by the regionalization of resources, which is generating substantial requirements for labor, resources, and beyond. The demand is evident across countless sectors.
