Climate Tech in 2026: Investors See Data Centers, Power Demand, and Grid Resilience Driving the Next Wave

This was supposed to be the year climate tech faded out. Instead, as 2025 wraps, investors are looking ahead to 2026 with a sense that the sector is adapting—pulled forward by relentless power demand, accelerating cost curves in clean energy, and a growing focus on grid reliability.

Policy headwinds have been real. President Donald Trump and the Republican Party have worked to dismantle the Biden administration’s hallmark industrial and climate policies. In Europe, the European Union has also begun to ease off some of its most aggressive targets. Yet the investment picture hasn’t collapsed the way many expected.

Venture investment in climate tech in the U.S. and Europe ended 2025 essentially flat compared with 2024, according to CTVC. For a sector that has been repeatedly declared “over” every time politics shift, that steadiness matters. It suggests there’s now a stronger economic core to many climate technologies—especially as solar, wind, and batteries continue to get cheaper and more capable, narrowing or eliminating the gap with fossil fuel alternatives in more real-world use cases.

That same reality—clean power as an increasingly competitive input—has put a specific customer base at the center of climate tech’s next chapter: data centers.

Data centers continue to dominate

In 2025, the collision between AI and electricity demand became one of the defining themes in energy markets. For climate tech investors, it has reframed the conversation away from abstract decarbonization timelines and toward near-term infrastructure decisions: Where will the electrons come from, how quickly can power be built, and what happens when the grid can’t keep up?

Investors surveyed by TechCrunch largely converged on one expectation: data centers will remain central to climate and energy discussions throughout 2026.

Tom Chi, founding partner at At One Ventures, argued that hyperscalers are building momentum and money flows that won’t be easy to reverse. “They are creating their own financial ecosystem, and there is enough actual momentum in current AI efforts that I don't see the hyperscalers pulling back in 2026,” he said.

Po Bronson, managing director at SOSV’s IndieBio, described a similar drumbeat from corporate conversations. “I'm still hearing about an ever increasing concentration of effort and focus on data centers virtually every single day in meetings, especially with corporates,” Bronson said.

But investor expectations aren’t limited to “more load.” Lisa Coca, partner at Toyota Ventures, expects the conversation to evolve from raw demand to durability and self-sufficiency. In her view, 2026 will push data center operators to focus on resilience and accelerating plans to decouple from the grid. That matters because local utilities, grid operators, and communities have grown more sensitive to sudden, massive new loads—especially if people believe those loads could raise electricity prices for everyone else.

Even with shifting priorities, the power build-out remains unavoidable. Investors cited multiple generation and storage pathways that may benefit from the data center boom, including geothermal, nuclear, solar, and batteries. Daniel Goldman, managing partner at Clean Energy Ventures, emphasized that economics are already moving in clean energy’s favor: “Zero-carbon generation is already among the cheapest sources of power, and growing demand for both grid-scale and distributed batteries is accelerating cost reductions faster than expected.”

There’s also a risk that enthusiasm for AI-driven infrastructure could cool. Some investors told TechCrunch the AI bubble could burst, raising the question of whether the energy build-out would stall alongside it. Kyle Teamey, managing partner at RA Capital Planetary Health, allowed that a bubble could pop in 2026—but said the near-term spending is already committed: “The spending for 2026 is already budgeted. The train has left the station.”

Andrew Beebe, managing director at Obvious Ventures, suggested that if there is a bubble, it may appear in data center build-outs rather than power generation. He expects a data center bubble might burst in 2026 or early 2027, but he doesn’t see comparable froth on the electricity side: “We still need a LOT more power, and we’ll use that — no build-out bubble there … yet.”

Beyond AI, some investors anticipate the conversation broadening into industrial capacity and supply chains. Anil Achyuta, partner at Energy Impact Partners, expects “reindustrialization” to become a larger theme. As he framed it, rebuilding supply chains for complex systems—like robotics, batteries, and power electronics—will matter as much as any single breakthrough technology.

The continuing quest for power

If 2025 was the year energy demand became unavoidable, 2026 may be the year investors start placing bigger bets on how that demand gets met—especially as data centers, electrification, and grid constraints collide.

One clear beneficiary has been nuclear fission. In the final weeks of 2025, nuclear startups announced rounds totaling over $1 billion, fueling speculation that multiple companies could pursue public listings—either by SPAC or a traditional IPO—in 2026.

“Nuclear everything is in vogue right now,” Teamey said.

Still, investors recognize the timeline challenge: new nuclear capacity generally won’t arrive fast enough to solve immediate demand surges. That near-term gap has pushed many developers toward options that can be deployed more quickly. Solar paired with batteries has become especially attractive because it can be built at speed, scaled modularly, and often penciled out economically.

Grid-scale batteries stood out as a major winner in 2025, with record-setting deployments. Investors expect that momentum to continue in 2026, helped by new chemistries and more realistic scaling strategies. Alternative battery approaches such as sodium-ion and zinc are expected to come to market and potentially push costs down further—expanding the range of use cases where batteries can compete.

Leo Banchik, director at Voyager, expects more growth in 2026 from new “plays” on battery chemistry and business models. He also pointed to a painful lesson learned from earlier cycles: building gigafactories too early, before demand and unit economics were proven. In his view, this next wave is more disciplined—suggesting fewer headline-grabbing expansions, and more focus on fundamentals that can sustain scale.

Geothermal was another technology several investors highlighted as ready for a larger role. Enhanced geothermal, in particular, is increasingly viewed as mature enough to expand deployment in 2026. Joshua Posamentier, managing partner at Congruent Ventures, predicted a sharp growth curve: “Geothermal will be hot on solar's heals in terms of new generation.” He contrasted that with natural gas, which he described as growing more linearly, constrained by limited new turbine manufacturing capacity.

At the same time, investors cautioned against building an entire climate thesis around data centers alone. Laurie Menoud, founding partner at At One Ventures, emphasized that AI facilities are only one driver of demand: “Data centers are one demand driver, not the whole market.” In other words, climate tech companies that can serve multiple markets—industry, buildings, transportation, and grid modernization—may prove more resilient than those built solely around data center load growth.

Which startup is most likely to go public in 2026?

When investors were asked which climate tech or clean energy startup might be most likely to go public in 2026, not everyone wanted to predict. Among those who did, nuclear and geothermal companies came up repeatedly, reflecting both rising investor enthusiasm and the capital intensity of building real infrastructure.

The company named most often was Fervo, an enhanced geothermal startup that recently raised a $462 million round. Investors see Fervo as a sector leader, and its current work underscores why public-market access could matter: the company is building a 500-megawatt development in Utah intended to serve as a template for future geothermal power plants. Going public—via IPO or SPAC—could provide deeper reserves to finance additional projects.

In the detailed responses captured by TechCrunch, Achyuta also named Commonwealth Fusion and Redwood Materials as personal guesses for potential IPO candidates in 2026, while noting he could be wrong.

Trends to watch in 2026

Beyond the headline tug-of-war between AI demand and grid capacity, investors pointed to a broader set of climate tech themes that could shape 2026. Many are less flashy than a new reactor design or a mega data center—but could be just as important to keeping projects moving.

Grid execution and interconnection

Amy Duffuor, general partner at Azolla Ventures, said the industry should focus more on “grid execution” as its own category. She argued that the “quiet winners” will be companies that make interconnection, planning, and deployment faster—whether through software, hardware, or supply-chain solutions that help utilities move projects forward.

This framing reflects a practical reality: adding more clean generation is only part of the problem if the grid can’t connect it quickly or reliably. Tools that streamline planning and reduce delays can effectively unlock capacity without waiting for major new builds.

Resilience, adaptation, and hardening the grid

Multiple investors pointed to resilience and adaptation as defining themes for 2026, including Coca and Posamentier. Achyuta highlighted a particularly concrete application: robots that can bury electrical transmission lines faster and more cheaply than humans. Faster undergrounding could reduce wildfire risks and improve grid reliability—an increasingly urgent priority as climate-driven extreme weather and fire seasons strain infrastructure.

EV trucking and the Tesla Semi

Beebe singled out electric trucking as another area to watch, pointing to the potential impact of the Tesla Semi. He said one of the biggest pieces of news in 2026 could be the vehicle’s release and specifications, arguing that its range and pricing could reshape the industry in a way comparable to the influence of the Model S or 3.

AI meets the physical world

AI will likely influence climate tech beyond power demand alone. Matt Rogers, founder at Incite and Mill, expects “massive innovation where AI meets the physical world in 2026” across both infrastructure and consumer applications. He described a future where AI combined with smart hardware and physical infrastructure drives change in “trillion-dollar industries from manufacturing to life sciences to food systems.”

And while much of venture capital tends to chase what’s hottest, Bronson offered a contrarian reminder: breakthroughs sometimes arrive after a sector falls out of favor. He suggested that when investors finally give up on a category, it can create the conditions for real progress to emerge—once the noise dies down and teams continue building.

Conclusion

Heading into 2026, climate tech investing appears less defined by idealism and more by infrastructure urgency: powering data centers, building resilient grids, scaling batteries, and expanding new generation like geothermal and—over the longer arc—nuclear. Even with shifting politics, the sector’s next phase is being shaped by economics, reliability, and execution.

This article is based on reporting originally published by TechCrunch, including investor comments collected through TechCrunch’s survey.

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