Climate Investments Jumped 55% as Data Centers' Share Rose from 3% to 34% in One Year

A mid-2026 report by Currence revealed that venture capital investments in climate tech reached $26.1 billion in the first half of the year, up 55% year-over-year — but the most telling figure is that 34% of these investments are now linked to data centers, compared to just 3% a year ago.

Three deals announced in a single week clearly illustrated this shift; Form Energy secured $750 million in Series G led by T. Rowe Price to expand its West Virginia factory for iron-air batteries capable of storing energy for up to 100 hours, as its order backlog jumped from 20 to 80 GWh. In the same week, Base Power raised $1 billion at a $13 billion valuation led by Ribbit Capital to launch its home battery, while Valar Atomics completed $1 billion in Series B at a $6 billion valuation led by Sequoia Capital to develop small modular nuclear reactors to power AI data centers.

The deeper insight lies in the composition of investors, not in the numbers alone; the leadership of T. Rowe Price — a public equity market institution — and the presence of Ribbit Capital, a fintech-focused fund, leading power hardware rounds indicate that this sector has moved beyond specialized climate funds and is now attracting diverse types of capital. This is further reinforced by Valar Atomics' revelation of a contract with Nvidia to power a 30 MW AI factory without relying on water.

These dynamics indicate that AI energy deals are now being built on demand curves from data centers rather than emission reduction mandates — a radical shift in valuation logic. However, these valuations assume continued growth in demand from data centers; any slowdown in AI capital expenditure will directly translate into a contraction in energy storage deal values.

What Do These Terms Mean?

Series G: A late-stage funding round indicating that the company has reached a stage of significant expansion after achieving sustainable sales.

Iron-Air Battery: A battery that relies on iron oxidation for storage, capable of retaining energy for consecutive days at a lower cost than lithium batteries.

Small Modular Reactor: A small nuclear reactor built in a factory and transported by truck, providing clean and reliable power faster than traditional plants.

Backlog: The total sold orders that have not yet been delivered, serving as a direct indicator of the company's future demand strength.