Climate Funds Close on a Record $92B as Power Displaces Chips in the AI Race

Form Energy's $750 million funding round coincided with data showing that 179 climate technology funds have closed on a record $92 billion, alongside a map published the same day by Sifted covering nuclear, geothermal and tidal energy startups in Europe.

Taken together, these indicators suggest that electricity availability has replaced graphics processing units as the scarcest input in the artificial intelligence race, as power becomes the main constraint on data centre expansion.

The iron-air chemistry developed by Form Energy targets multi-day storage, which is the same constraint facing renewable-heavy grids when they serve round-the-clock data centre loads. In addition, the company's contracted backlog has tripled and its customers include Xcel Energy and Google, reflecting a move by large cloud computing firms to contract storage directly.

On the investment side, the power stack serving artificial intelligence, spanning generation, storage, grid software and interconnection, offers revenue visibility close to that of infrastructure projects, which is not available in most AI applications. For that reason, crossover funds led this round rather than dedicated climate investors.

Key terms explained:

Graphics processing units (GPUs): Specialised chips used to train and run artificial intelligence models.

Multi-day storage: Technologies that hold electricity for days rather than hours, offsetting intermittent renewable supply.

Interconnection: The process and infrastructure for connecting energy projects to the public electricity grid.

Crossover funds: Funds that invest in both private and listed companies, typically entering at late stages before a public offering.

Revenue visibility: An investor's ability to forecast future revenue based on long-term contracts.