Venture Capital Is Rushing to Invest in Climate Tech, but on 1 Condition

The halo effect of AI extends even to the troubled climate tech sector. According to a Pitchbook analyst note, investment in climate tech companies that were linked to AI surged to a record high in 2025 even amid turbulence in the broader climate tech sector. Total venture capital investment through December 15 of last year hit $6.6 billion across 304 deals. That’s a 59 percent jump from 2024’s total despite 73 fewer deals.

“AI is increasingly becoming an enabler within the climate technology ecosystem,” reads the note penned by senior research analyst John MacDonagh.

The year was driven by a handful of big ticket deals. Crusoe Energy landed a $1.4 billion Series E round of funding in October. Crusoe develops low-impact datacenters, optimized for AI, and is, notably, a partner alongside Oracle and OpenAI in President Donald Trump’s $500 billion Stargate datacenter project. KoBold Metals, an AI-powered mineral discovery and mining company, closed two major funding rounds after discovering a copper deposit in Zambia. It announced a $537 million Series C in January and an additional $163.4 million in November. Fermi, meanwhile, and announced a $350 million Series C in September. It aims to develop next generation energy grids to serve AI datacenters.

These megadeals demonstrate investor interest in low-carbon solutions for datacenters. Relatedly, AI is being increasingly adopted to monitor grid infrastructure, and systems for energy consumption and storage. And two additional areas within climate tech where AI is being strongly adopted include weather forecasting and geospatial monitoring, such as satellite imaging, according to Pitchbook.

“The number of applications of AI in climate tech means the breadth of AI adoption across the space varies considerably,” the note reads.

The record year for AI-involved climate tech is particularly meaningful in context with the difficulties the sector as a whole has faced during President Donald Trump’s first year in office. From day one, Trump made his views on renewable energy abundantly clear, eventually making good on threats to withdraw even committed federal funding from numerous clean tech companies, and paring back or eliminating tax incentives with some key exceptions. Even so, climate tech did eke out some gains, with investment climbing roughly 8 percent year-over-year to $40.5 billion in 2025, according to Sightline Climate.

That growth was marked by fewer, bigger deals as overall deal count fell to a four-year low. Sightline Climate also notes that power for datacenters was a driving force in the second half of the year for those investments.

The early-rate deadline for the 2026 Inc. 5000 is Friday, January 30, at 11:59 p.m. PT. Apply today.