AI Powers Green-Tech Surge That Defies Trump's Climate Retreat

Green firms in the US have found something of a lifeline in artificial intelligence after being bogged down by high interest rates, shrinking funding and, more recently, President Donald Trump’s sharp rollback of support.

Clean technology companies that have inked deals to support data centers have seen their stocks soar this year, outperforming the S&P 500.. Even as some clean energy firms struggle to convince investors that they can thrive during Trump’s second term, the AI-driven surge in electric demand — the most in decades — is providing clear tailwinds for others.  KR Sridhar, Bloom Energy, founder and CEO tells Bloomberg Businessweek Daily says AI will drive the need for energy, including fuel cells.

Even as some clean energy firms struggle to convince investors that they can thrive during Trump’s second term, the AI-driven surge in electric demand — the most in decades — is providing clear tailwinds for others.

“That has reinvigorated enthusiasm for companies that benefit from the trend,” said Jeff Osborne, a senior clean energy analyst with TD Cowen.

But the data center boom may prove short-lived for some carbon-free tech companies. While the age of AI is just starting, the ability of renewable firms to continue benefiting could be limited by a White House keen to boost fossil fuels and kill wind and solar.

Other clean technologies aren’t facing the same headwinds. Trump is an unabashed supporter of nuclear power, which is also seeing a rebound in public support. Geothermal today provides less than 1% of US generation capacity, but new drilling techniques and support from both tech giants and Energy Secretary Chris Wright have positioned it for growth.

Nuclear is an “ideal supply source for data centers,” and companies are willing to pay a premium for carbon-free, round-the-clock power, said David Brown, director of the energy transition practice at Wood Mackenzie.

Even before Trump took office for a second term, tech giants like Microsoft Corp. were seeking nuclear power. The company signed a deal with Constellation Energy Corp. last year for energy from the Three Mile Island plant, set to restart in 2027. Constellation struck a similar deal with Meta Platforms Inc. in June to sell power from an Illinois nuclear plant.

Almost a quarter of all venture funding for the US climate tech sector went to nuclear startups in the first half of this year, with firm TerraPower LLC closing the largest deal in the clean power sector at $650 million, according to BNEF. Funders include Bill Gates, who also founded the company, and Nvidia Corp.’s venture capital arm.

In addition, firms focusing on grid-enhancing technologies are also attracting funding, Osborne said. That includes startups like Veir Inc., which is making superconducting powerlines it thinks can solve the AI-fueled power crunch, and Heron Power Electronics Co., which signed a letter of intent to sell next-generation transformers to data center developer Crusoe in June.

A senior official said the Trump administration is working with states and utility regulators to speed data center development while looking to lift restrictions and roadblocks. These successes come as tax credits for some renewables are set to be wound down as part of Trump’s tax law.

“It is dangerous out there for a solar and wind company right now,” said Nancy Pfund, managing partner of impact investment firm DBL Partners and an early Tesla Inc. investor, adding that firms will need to cut costs and look at developing projects in other countries.

Altogether, companies canceled, closed or scaled back more than $22 billion in clean-energy investments during the first half of the year, according to research group E2. That’s about 17% of green projects announced since the start of 2022.

“Even though AI is a national priority for the Trump administration, the energy sector policies that the president has ultimately put forward threaten to slow down US momentum in AI,” Woodmac’s Brown said.

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