Power Consumption Is Rising. Energy Startup Funding? Not So Much

Although energy consumption is on the rise, last year global investment in energy startups hit its lowest point in four years. Will power-hungry AI help bring the sector back?

Apr 18, 2025 - 12:29

Power Consumption Is Rising. Energy Startup Funding? Not So Much

Energy consumption is on the rise. Last year, global power demand surged by 2.2%, per The International Energy Agency. That’s more than 40% above the average annual increase over the prior decade.

No one’s predicting a slowdown either. With power-hungry AI platforms scaling up, rising energy consumption in emerging economies, and air conditioners turned up amid intensifying heat waves, demand looks poised only to rise.

So, given these trends, you might expect to see equity investment in energy-related startups moving higher as well.

But no, that isn’t happening. In 2024, global investment in energy startups hit its lowest point in four years, per Crunchbase data.

So far, this year is off to a middling start as well. In Q1, energy-related startup investment hit its lowest point in five quarters, as charted below.

April shower of deals

One bright spot? After a slow Q1, energy investment has picked up a bit this month.

One of the biggest rounds came earlier this week. Silicon Valley-based Mainspring Energy, a provider of onsite power generation systems for businesses, utilities and data centers, closed on $258 million in Series F funding led by General Catalyst.

A couple weeks before that, Nashville, Tennessee-based Silicon Ranch, known for utility-scale solar installations in the Southeastern U.S., secured $500 million from European infrastructure investor AIP Management. Founded in 2011, the energy company has raised more than $2 billion, according to Crunchbase data.

Austin, Texas-based Base Power, meanwhile, packed up a big early-stage round. The 2-year-old company, which provides battery backup power for residential properties, landed $200 million in a Series B financing led by Addition , Andreessen Horowitz, Lightspeed Venture Partners and Valor Equity Partners.

Power-hungry AI

While funding for pure-play power companies hasn’t been exactly rollicking, we are seeing generous investment in ventures that include an emphasis on energy efficiency and infrastructure spending in their broader business plans.

The far-and-away leader in this regard is The Stargate Project, an AI joint venture created by OpenAI, SoftBank, Oracle and MGX. Backers have said they intend to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the U.S.

As part of this effort, Stargate is currently soliciting proposals to build multigigawatt infrastructure tailored for the power management demands of AI workloads. Stargate says it plans to deploy $100 billion immediately toward this and other priorities.

Room for optimism

Given its comparatively low levels recently, it’s easy to see energy startup investment rising from here. Moreover, this is a space known for giant rounds in hot spaces like fusion.

It won’t take much to power investment levels higher.

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Energy Startup Funding