AI Boom Takes Over New York Climate Week, and Not Everyone in Climate Tech Is Happy
Climate tech startups are riding the AI data-center boom to raise money, but some founders say the focus is crowding out other promising climate sectors, TechCrunch reported.
Much of the climate tech community, like the rest of the U.S. economy, is eagerly riding the AI wave, according to the report. Some have reservations about the number of natural gas power plants being built to supply AI data centers. But because many climate tech startups are energy-focused or energy-adjacent, the buildout has been embraced as an opportunity to get companies through the valley of death.
The focus continues a trend from the past year. As climate tech companies struggled to get financing — because of canceled federal grants or investor hesitancy — those that could change their pitch to match the AI mania did so, TechCrunch reported. The pivot has helped many climate tech startups land fresh funding from investors. Total venture deal value has risen for four consecutive quarters, cresting the $14 billion mark in the first quarter of this year, according to the most recent available data from PitchBook cited by TechCrunch. It is the best fundraising environment for climate tech in the last few years, with most of the deal value driven by sectors boosted by data center construction, including the built environment, grid infrastructure, and dispatchable energy that can be turned on or off when needed.
The enthusiasm was visible during a panel at New York Climate Week, according to the report. When two founders were asked whether they would prefer the AI buildout to proceed at its current pace or at a more climate-responsible speed, both said without hesitation that faster was better. Their startups were both in energy.
Not everyone agrees. Several founders told TechCrunch they felt the data center boom was distracting from other promising segments of climate tech, including companies that were meeting their targets without relying on AI mania.
One founder said corporations are still interested in climate, but the difference today is that large companies do not want to crow about it, mostly for fear of drawing the Trump administration's ire.
There were also signs that the AI boom was beginning to wear thin on some. For many startups, money for scaling was hard to find three years ago, even if they were showing promising results. Now, customers are clawing their way into demos. When TechCrunch asked several people where the money was three years ago, it received more than a few knowing eye rolls in reply. The people acknowledged it is the world they live in these days, and smart entrepreneurs are finding ways to meet customers where they are.
The undercurrent at New York Climate Week, according to the report, was that the data center party will not last forever, but it might last long enough to help startups build durable businesses. Once that happens, they can refocus on the carbon-cutting mission they were founded to pursue.
Editor's Summary
The AI boom shaped New York Climate Week as climate tech startups pursued data-center-related funding and energy demand. Venture deal value rose for four consecutive quarters and topped $14 billion in the first quarter, according to PitchBook data cited by TechCrunch. Some founders warned that the focus could overshadow other climate sectors, even as they acknowledged the current opportunity may help startups build lasting businesses.