AI now drives the biggest climate tech deals – demand soars for greener data centres

From massive data centres to energy-intensive computations, the infrastructure required to fuel AI's rise is increasingly catching the attention of climate tech investors. In fact, companies focused on building and upgrading these systems landed some of the largest investments in 2024, as Trellis highlights.

A recent report by Sightline Climate, a leader in climate tech intelligence, reveals how high interest rates and other economic pressures led to a third consecutive year of declining overall climate tech investments. However, sectors tied to the AI-driven demand for data infrastructure defied the downturn. Energy investment surged to $9.4 billion (€8.6 billion)—a 12 percent increase—while buildings saw a 10 percent rise, totaling $2.7 billion (€2.5 billion).

AI’s energy demands are immense. For example, a single generative ChatGPT query consumes about 3 watt-hours of electricity—nearly 10 times the energy used by a Google search—according to the International Energy Agency. To put that into perspective, ChatGPT could use 1.4 terawatt-hours of electricity annually if scaled for widespread consumer use, comparable to the annual power consumption of a small country like Estonia.

The rise of AI is therefore presenting both challenges and opportunities for climate tech investments. Companies like Google, Amazon, and Microsoft have set ambitious emissions targets, spurring interest in technologies that enable cleaner AI growth. “The rapid rise in AI demand creates challenge and opportunity for climate tech investment,” said Kim Zou, co-founder and CEO of Sightline Climate. She noted the strain on already constrained grids but also highlighted the momentum for innovative clean energy solutions, such as nuclear and geothermal power, energy-efficient chips, and liquid cooling systems.

Prominent examples of climate tech investments related to the demand for AI and energy include Amazon’s $500 million (€460 million) investment in X-Energy, which is developing advanced nuclear reactors with a goal of deploying 5 gigawatts of new capacity across the U.S. by 2039. Form Energy (another U.S. business) which has created an iron-based battery capable of storing electricity for 100 hours, raised $405 million (€370 million) to address challenges like intermittent solar and wind power. Crusoe Energy, another north American company and the biggest beneficiary of AI-related climate tech funding in 2024, raised $600 million (€550 million) to expand its vertically integrated suite of AI-optimised data centers powered by clean energy, building on its origins in cryptocurrency mining. Brazil’s Scala also scored one of the ten biggest climate tech deals last year, raising $500 million (€460 million) for clean energy-powered data centers in Latin America.

The surge in AI-driven demand is creating a “perfect storm” for energy innovation, according to Anku Madan of Obvious Ventures. With data centers, EVs, and industrial electrification all contributing to unprecedented power needs, utilities and developers now have a real incentive to adopt advanced technologies, he told Trellis. Microsoft’s announcement of an $80 billion (€73.4 billion) investment in AI-enabled data centers underscores the scale of the opportunity, with hundreds of billions of dollars expected to flow into the infrastructure required to power AI’s growth.

Europe's biggest climate tech deals

While no European companies cracked the top list for AI or energy-related climate tech investments in 2024, the region still managed to make its mark in other key sectors. France’s Electra and Sweden’s Stegra each secured $300 million (€275 million) to drive advancements in clean mobility and fossil fuel-free steel production, respectively. These deals highlight Europe’s continued focus on decarbonising heavy industry and transport.

2024 vs. 2023

Compared to 2023, 2024’s mega-deals were smaller, averaging $500 million (€460 million)—a sharp drop from 2023’s $780 million (€715 million) average, when batteries and their supply chains dominated the top deals. Last year’s standouts like Swedish battery manufacturer Northvolt and Redwood Materials (which makes battery components in the U.S.) reflect a period of explosive growth, whereas this year’s smaller checks signal a shift toward a more cautious, selective investment landscape. Despite the decline, AI-related infrastructure and clean power breathed new life into the sector, showing that climate tech investors are prioritising critical infrastructure over speculative growth.