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“I don’t think that there has been a slam dunk case on a company that we’re excited about yet.”
At San Francisco Climate Week, everyone wanted to talk about artificial intelligence.
“I was looking through all of the events on SF Climate Week, and it seemed like every single one of them had AI somewhere in the name,” joked (sort of) Rohan Nuttell of OpenAI last week, while moderating a panel called AI for Climate.
Sure, with over 300 events, there were opportunities for climate nerds to learn about carbon dioxide removal or sustainable fashion or grid infrastructure. But AI was inescapable. I heard from companies using AI to monitor flood risk, model forest carbon sequestration, and help utilities identify vulnerabilities from climate threats. I even learned about a company using AI to decarbonize pet food.
Yet one notable section of the climate world wasn’t buying the hype: Investors. In my one-on-one conversations with venture capitalists and other financiers throughout the week, the prevailing approach was wait and see. It was a striking departure from the rest of Silicon Valley, where 6-month-old AI startups are getting multi-billion-dollar valuations.
“I think there are very few large business opportunities that have single-handedly been unlocked,” Sophie Purdom, managing Partner at climate tech VC Planeteer Capital, told me, with regards to AI. “Maybe they make it better or faster or whatnot. But I don’t think we’ve seen a whole lot of new large markets that have suddenly been uniquely unlocked in climate.”
One problem is that AI can mean anything from “we have a machine learning algorithm” to “we use a large language model to help write your climate grant applications,” as this company does. But that distinction is important. Generative AI, which takes in reams of data and spits out brand-new content (think ChatGPT or DALL-E), is what’s been driving the AI hype machine since OpenAI released ChatGPT in November 2022. Eventually, generative AI could have powerful climate implications — think the development of novel EV battery chemistries or synthesis of new, more climate-friendly proteins.
But not quite yet, Shawn Xu, a partner at climate tech VC Lowercarbon Capital, told me.
Xu said he was left disappointed after a Climate AI hackathon that Lowercarbon hosted with OpenAI last year. “To be honest there was a lag between the number of interesting AI engineers and founders who wanted to go build real climate applications coming out of that hackathon.”
In the last couple of months though, Xu has been excited to see AI companies proposing “foundational models” for sectors like materials science and biology. These are generative models trained on large datasets that can perform a wide variety of tasks, like a ChatGPT for meteorology or architecture that could build weather models or design green buildings. “But I don’t think that there has been a slam dunk case on a company that we’re excited about yet,” Xu said.
This doesn’t mean that Lowercarbon and other climate tech investors are avoiding AI investments. There are plenty of well-funded climate tech companies using increasingly powerful machine learning models and algorithms to analyze patterns in large datasets and predict outcomes. It’s just that this isn’t exactly new. Companies across many industries have been using this type of predictive AI for much of the last decade. Now incorporating generative AI in the form of large language models is becoming relatively common too.
“Anything that’s solving workflow inefficiencies, anything that’s helping you get context from somewhere else, anything that’s helping you understand more data,” are well understood applications of AI that Juan Muldoon, a partner at climate software VC Energize Capital, told me he’s excited about.
“I think you’re going to see it materially impact long-running operational costs for [energy] projects,” Scott Jacobs, co-founder and CEO of the sustainable infrastructure investment firm Generate Capital, told me. “It’s just another use of technology replacing humans.”
That doesn’t always make for a particularly flashy business. Muldoon cited one of Energize’s portfolio companies, Jupiter Intelligence, which “takes very, very large amounts of climate, weather, and terrain data to be able to more accurately predict asset level risks associated with particular climate events,” he explained. “So that’s a data AI company. But it’s not really marketed that way.”
Maybe that’s because in this era, the term is almost self-evident. As an old editor once told me, writing that a tech company uses “machine learning” or “AI” to perform data analysis can be as mundane and obvious as advertising that a company uses “the internet.” But as generative AI moves beyond advanced chatbots and towards the type of broader foundational models that Xu is most excited about, investment could heat up.
Xu told me that Lowercarbon has made a yet-unannounced investment in a company that gathers vast amounts of earth observation data, which could hopefully one day be used to create a “foundational model for earth science.” This model could potentially do things such as generate custom maps to track natural disasters or the climate risks to crops and built infrastructure. Xu says a company like this would be “a holy grail.”
Yet the main holdup to some of these “holy grail” companies is that we often lack not only enough data but a comprehensive understanding of how to characterize that data, said Clea Kolster, partner and head of science at Lowercarbon.
“We’ve seen a lot of pitches on AI for chemistry,” she told me. And while AI could spit out new atomic and molecular combinations for use in novel battery cells, “the amount of those new things that are actually going to be good is probably very small until you actually start to have a better understanding of how many of these materials work in different structures and environments.”
Even if scientists and researchers get a better handle on the datasets they’re working with, Purdom told me she’s generally skeptical of investing in companies that use AI to do basic R&D, citing the buzzy example of AI being used in critical minerals exploration and extraction “The competency of the prospecting and the R&D approach seems distinct to me from the actual value extraction, physical resource extraction part of the business,” she told me. The same could be said of using AI for battery design or protein development. “I have seen few examples where the platform approach of just the research and identification part is where there’s been a big standalone business.”
Not to say everyone takes that point of view. Bay Area-based KoBold Metals, an AI-enabled minerals exploration company, has raised over a billion dollars, with Bill Gates’ climate tech VC, Breakthrough Energy Ventures as a leading investor.
But overall, the potential for novel applications of AI in the climate space is still largely being figured out. And in these early stages, many climate investors are treading carefully.
“I have talked to a number of these AI companies,” Jacobs told me. “They’re talking about climate impacts and they have real value propositions that they’re going after. Great! But they don’t have real success stories yet.”
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The Department of Energy has put together a list of sites and is requesting proposals from developers, Heatmap has learned.
The Department of Energy is moving ahead with plans to allow companies to build AI data centers and new power plants on federal land — and it has put together a list of more than a dozen sites nationwide that could receive the industrial-scale facilities, according to an internal memo obtained by Heatmap News.
The memo lists sites in Texas, Illinois, New Jersey, Colorado, and other locations. The government could even allow new power plants — including nuclear reactors and carbon-capture operations — to be built on the same sites to generate enough electricity to power the data centers, the memo says.
Trump officials hope to start construction on the new data centers by the end of this year and switch them on by the end of 2027, according to the memo.
The agency will request formal feedback from artificial intelligence companies and developers about how best to proceed with its proposal as soon as Thursday, according to an individual who wasn’t authorized to speak about the matter publicly.
The effort, aimed at maintaining America’s “global AI dominance,” represents one of the few points of agreement between the Trump and Biden administrations. In the final days of his term, President Biden ordered the government to identify federal properties where new data centers could be built.
Scarcely a week later, President Trump issued an executive order lifting all Biden-era limits on AI development — but keeping the mandate to move quickly to maintain America’s alleged edge in the new technology. “It is the policy of the United States to sustain and enhance America’s global AI dominance,” the Trump order said.
The new memo proposes a list of 16 federal sites that could host AI data centers, new power plants, and other “AI infrastructure.” They include several sites where nuclear weapon components are made, including the Pantex site near Amarillo, Texas, and the Kansas City National Security Campus, which is operated by Honeywell International. The other candidate sites are:
Other sites could still be considered, the memo says, and the current list has no particular ranking or order.
The offer may not be enough to convince developers to work with the federal government, one energy expert told me.
“I think it’s important that the government is thinking about how to help the industry, but you also have to think about it from the perspective of the industry a little bit. Why is doing this on a DOE site better than doing this as a project in Texas?” said Peter Freed, a founding partner at the Near Horizon Group and the former director of energy strategy at Meta.
“Historically, the perspective is that anything involving government land just adds complexity,” Freed told me. “I love Idaho National Lab. It’s a national treasure. But if you want a data center there by the end of 2027 — where is the power going to come from?”
Only if the government were able to guarantee fast-track access to certain kinds of equipment — such as transformers or circuit breakers, which are in a severe shortage — would it make sense for most developers to work with them, he said.
The new memo raises the idea that “innovative energy technologies” including “nuclear reactors, enhanced geothermal systems, fuel cells, carbon capture, energy storage systems, and portfolios of on-site technologies” could be considered to power the new data centers.
The memo asks potential developers, “What information would you need to determine the suitability of various energy storage systems (e.g., subsurface thermal energy storage, flow battery, metal anode battery) as a means for supporting data center cooling or other operations?” It also asks what companies would need to know about a site’s suitability for carbon capture and storage operations. It asks, too, what information might be needed about a site’s topography, physical security, and earthquake risk to build a new nuclear power plant.
The memo doesn’t mention wind turbines or new solar farms, although they could fall under some of the terms it sets out. It also asks companies what information they might need about nearby nuclear power plants or the local power grid — and it inquires whether some data center operations could be turned on and off depending on local power availability.
Although the government could allow new data centers to be built, it won’t accept all liability for them. The memo adds that companies might need to “agree to bear all responsibility for costs and liabilities related to construction and operation of the Al data centers as well as other infrastructure upgrades necessary to support those data centers.”
The Trump administration seems intent on moving quickly on the proposal. Once it publishes the request, companies will have 30 days to respond.
Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.
President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.
Republican candidates won in two House races in Florida on Tuesday, one of which was looking surprisingly tight going into the special elections. The victories by Jimmy Patronis in Florida’s First District and Randy Fine in the Sixth District bolster the party’s slim House majority and could spell trouble for the Inflation Reduction Act as the House Ways and Means Committee mulls which programs to cut to pay for tax cuts. But the result in Wisconsin’s Supreme Court election was less rosy for Republicans. Liberal Judge Susan Crawford defeated conservative Brad Schimel despite Schimel’s huge financial backing from Tesla CEO and Trump adviser Elon Musk, who poured some $15 million into the competition. The outcome “could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of Trump’s new administration,” as The Wall Street Journalexplained.
The Trump administration announced mass layoffs across the Department of Health and Human Services on Wednesday, part of a larger effort to reduce the agency’s workforce by 25%. The cuts included key staffers with the Low Income Home Energy Assistance Program, which has existed since 1981 and helps some 6.7 million low-income households pay their energy bills. A 2022 white paper calls LIHEAP “one of the most critical components of the social safety net.” The move comes at a time when many U.S. utilities are preparing to raise their energy prices to account for higher costs for materials, labor, and grid upgrades. In a scathing letter to HHS Secretary Robert F. Kennedy. Jr., Senate Energy and Commerce Democrats call the workforce cuts “reckless” and demand detailed explanations for why roles have been eliminated.
Energy storage startup Energy Vault on Wednesday announced it had closed $28 million in project financing for a hybrid green hydrogen microgrid energy storage facility in California. The firm says its Calistoga Resiliency Center, deployed in partnership with utility company Pacific Gas & Electric, is “specifically designed to address power resiliency given the growing challenges of wildfire risk in California.” The zero-emission system will feature advanced hydrogen fuel cells that are integrated with lithium-ion batteries, which can provide about 48 hours of back-up power via a microgrid to the city of Calistoga during wildfire-related power shutoffs. The site is expected to be commercially operational in the second quarter of 2025.
“The CRC serves as a model for Energy Vault’s future utility-scale hybrid microgrid storage system deployments as the only existing zero-emission solution to address [power shutoff] events that is scalable and ready to be deployed across California and other regions prone to wildfires,” the company said in a press release. As Heatmap’s Katie Brigham wrote last fall, PG&E has become an important partner for climate and energy tech companies with the potential to reduce risk and improve service on the grid.
China will finalize its first-ever sale of a green sovereign bond Wednesday. The country is expected to issue the bond on the London Stock Exchange and has reportedly received more than $5 billion in bids. “It’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products,” Bloombergnoted. Green bonds are investment vehicles that raise money exclusively for projects that benefit the climate or environment. China’s finance ministry wants the bond to “attract international funds to support domestic green and low-carbon development,” and specifically climate change mitigation and adaptation, nature conservation and biodiversity, and pollution prevention and control. Some of the money raised might also go toward China’s EV charging infrastructure, according toReuters.
GE Vernova has now produced more than half of the turbines needed for the SunZia Wind project in New Mexico. When completed in 2026, the 2.4 gigawatt project will be the largest onshore wind farm in the Western Hemisphere.
Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.
The Inflation Reduction Act dedicated $27 billion to build a new kind of climate institution in America — a network of national green banks that could lend money to companies, states, schools, churches, and housing developers to build more clean energy and deploy more next-generation energy technology around the country.
It was an innovative and untested program. And the Trump administration is desperately trying to block it. Since February, Trump’s criminal justice appointees — led by Ed Martin, the interim U.S. attorney for the District of Columbia — have tried to use criminal law to undo the program. After failing to get the FBI and Justice Department to block the flow of funds, Trump officials have successfully gotten the program’s bank partner to freeze relevant money. The new green banks have sued to gain access to the money.
On this week’s episode of Shift Key, Rob and Jesse talk with Kristina Costa, who has been tracking the effort to bankrupt the green banks. Costa helped lead the Inflation Reduction Act’s implementation in the White House from 2022 to 2025 — and is a previous Shift Key guest. She joins us to discuss how Trump is weaponing criminal law to block a climate program, whether there’s any precedent for his actions, and what could come next in the legal battle. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: There's kind of two lines you hear from the Trump administration about this, two claims made by the Trump administration about the reason for these seizures, and I just wanna talk about them briefly because this is an unprecedented action. We should look at why the government has claimed that it needs to take this unprecedented action.
The first has to do with this video made by Project Veritas, a kind of conservative media organization …
Kristina Costa: A hit squad.
Meyer: A hit squad that recorded, unwittingly, an EPA official who described the EPA’s actions during December 2024, between the loss of the election and the inauguration, as “throwing gold bars off the Titanic.” That the agency was so eager and desperate to spend as much of the IRA down as it could before the Trump administration took office that it was like they were throwing gold bars off the Titanic — you know, a sinking ship.
The EPA administrator has fixated on this line and described it as waste and self-dealing, suggesting reckless financial mismanagement, blatant conflicts of interest, astonishing sums of tax dollars awarded to unqualified recipients and severe deficiencies of regulatory oversight.
You were involved in setting up the IRA. I wonder, first of all, just how do you reflect on this episode? And second of all, was the Biden administration doing the proverbial version of throwing gold bars off the Titanic during the post-election period?
Costa: Yeah, so I mean, it falls apart as any sort of quote-unquote evidence in what's happening with the Greenhouse Gas Reduction Fund if you just believe in the linear nature of time. So, as I said, we announced EPA made the selections in April of 2024. The funds were fully obligated in August of 2024. Grantees were starting to make announcements about investments in October of 2024 — all dates which precede election day by weeks to months. And so it is just a complete fabrication on the part of Lee Zeldin that there was any sort of inappropriate action on the part of the Biden EPA or any of the other agencies in doing what Congress directed us to do, which was to award and obligate funds to recipients consistent with the provisions of the Inflation Reduction Act that authorized and appropriated funds for the programs.
We had also — and I think I might have said this when I was with you guys in December — one of the first things that we did, from the White House implementation team, was to meet with all of our grant agencies and, in September and October of 2022, set targets for them for how much funding we wanted them to try to award and obligate by the end of the administration. And we set a goal, basically, that we would be aiming to have at least 80% of the available funds obligated by the end of 2024. And we hit that. And so the idea that there was some massive acceleration post-election — like, were there some contracts that the agencies obligated in December and January that, in the event of a Kamala Harris administration, they would've maybe obligated in February and March instead? Sure. I'm not going to say otherwise, but those grants had been made already. There wasn't this rush of actual decision-making.
Music for Shift Key is by Adam Kromelow.