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It was the best of times, it was the worst of times\u00a0\u2026 I\u2019ll spare you the rest, but the clich\u00e9 Dickens line really does sum up this year\u2019s New York Climate Week.<\/p>\n
Much of the climate tech community \u2014 like the rest of the U.S. economy \u2014\u00a0is eagerly riding the AI wave. Some have reservations about the sheer quantity of natural gas power plants<\/a> being built to power AI data centers. But because many climate tech startups are energy-focused or energy-adjacent, the buildout has been embraced as an opportunity to get companies through the valley of death<\/a>.\u00a0<\/p>\n The singular focus also means some promising sectors risk being overlooked.<\/p>\n It\u2019s a continuation of a trend that\u2019s emerged over the last year. As climate tech companies struggled to get financing \u2014 either because of canceled federal grants or investor hesitancy \u2014 those that could change their pitch to match the AI mania did so.<\/p>\n The pivot has helped many climate tech startups land fresh funding from investors. Total venture deal value has risen for four consecutive quarters, cresting the $14 billion mark in the first quarter of this year, according to the most recent available data from PitchBook. It\u2019s the best fundraising environment for climate tech in the last few years, with most of the deal value driven by sectors boosted by data center construction, including the built environment, grid infrastructure, and dispatchable energy that can be turned on or off when it\u2019s needed.<\/p>\n It\u2019s an opportunity few have wanted to pass up.<\/p>\n One exchange during a panel at New York Climate Week captured the moment: Two founders, when asked whether they\u2019d prefer the AI buildout to proceed at its current pace or at a more climate-responsible speed, said without hesitation that faster was better. Unsurprisingly, both of their startups were in energy.<\/p>\n And yet not everyone agrees.<\/p>\n I heard from several founders who felt that the data center boom was distracting from other promising segments of climate tech, including those that were meeting their targets without having to rely on AI mania.<\/p>\n \u201cCorporates are still interested in climate,\u201d one founder told me. The difference today is that large companies don\u2019t want to crow about it, mostly for fear of drawing the Trump administration\u2019s ire.\u00a0<\/p>\n There were also signs that the AI boom was beginning to wear thin on some. For many startups, money for scaling was hard to find three years ago, even if they were showing promising results. Now, customers are clawing their way into demos. \u201cWhere was this money three years ago?\u201d I asked several people. I received more than a few knowing eye rolls in reply.<\/p>\n It\u2019s the world they live in these days, they acknowledged. The smart entrepreneurs are all finding ways to meet customers where they are.\u00a0<\/p>\n Ultimately, the undercurrent at New York Climate Week was that the data center party won\u2019t last forever, but it might last long enough to help startups build durable businesses. Once that happens, they can refocus on the carbon-cutting mission they were founded to pursue.\u00a0<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n