GM's incredible new role is driving the AI boom

Why are auto companies involved in supplying energy to the AI revolution?

This is exactly what's happening at General Motors, one of the largest automakers in the United States.

In a move to blur the line between automation and energy infrastructure, GM is entering the electricity business through a new contract with Redwood Materials, a startup run by Tesla Cofounder JB Straubel.

As GM electric vehicles batteries approach the end of their useful life in cars, the company will live a second life through a recycling agreement with Redwood. The deal includes a new US-made battery from GM and a second-life battery pack from GM electric vehicles.

The batteries will provide energy to AI data centers, and GM and Redwood announced on Wednesday.

“The market for grid-scale batteries and backup power is not just expanding, it's becoming a critical infrastructure,” said Kurt Kelty, Vice President of Battery, Promotion and Sustainability at GM. “The demand for electricity is rising and only accelerates. To address that challenge, the US needs energy storage solutions that can be quickly and economically deployed and built at home. GM batteries can play an essential role.”

The collaborative efforts announced a few weeks after Redwood launched its new energy storage arm, Redwood Energy, are already paying off.

GM EV Battery supports the power of Nevada's new Redwood Microgrid, the world's largest second-life battery installation, according to the startup. The system supports Crusoe, a company that builds AI data centers that require large, constantly generated power.

As AI data centers push electricity demand to new highs, the need for grid-scale energy storage has become urgent. What's surprising is that an automatic battery originally designed to move around the car is tapped to stabilize the electric grid and allow for the next wave of computing.

The collaboration also highlights a larger industrial trend. It is about turning retirement assets into strategic resources as global supply chains are highlighted by geopolitical tensions and tariff threats.

“We can deploy both GM's Second Life EV batteries and new batteries in Redwood's energy storage systems, providing fast, flexible power solutions and enhancing the independence of America's energy and manufacturing,” Straubel said in a statement.

Details are expected later this year, but the road from EVS to AI will pass power out and hope GM will be in the driver's seat.

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