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AI's growing impact on the physical world is giving next-gen batteries a boost, says Gene Berdichevsky, CEO of battery materials maker Sila.

Why it matters: After the data center boom, the AI economy's focus will shift to battery-heavy industries like drones, robotics and satellites.

Driving the news: Sila last week announced a conditional commitment for a $1.4 billion loan from the Department of Defense's Office of Strategic Capital.

Sila plans to spend "the vast majority of the funds" building out capacity to make its silicon carbon anodes at its factory in Moses Lake, Washington, says Berdichevsky.

A smaller portion of the loan will help Sila build a lithium-ion battery cell manufacturing facility — its first move into full battery-cell production — for these emerging applications.

What they're saying: "We aren't necessarily looking to become a battery company, but if that's what America needs, we will step in and fulfill some of that," says Berdichevsky, an early Tesla employee and the principal engineer of the Tesla Roadster battery.

The intrigue: The DOD loan is aimed at helping the U.S. compete with China, which controls the world's markets for graphite, anode material processing, and lithium-ion battery cell production.

"The graphite bottleneck is very real," says Berdichevsky.

How it works: Sila's anode can juice up a lithium-ion battery, adding energy density, which translates to longer use or lighter weight.

Catch up quick: Founded in 2011, Sila has raised over $1 billion from Sutter Hill Ventures, T. Rowe Price, Bessemer Venture Partners, Coatue, and Perry Creek Capital.

Sila started operating its battery materials factory in Moses Lake last year, with the first phase of capacity at 1 to 2 GWh.

What's next: The loan will help Sila build out its factory, going from producing "single-digit" GWh to "tens" of GWh, Berdichevsky says.

Over the next five to seven years, the goal is to move to a couple hundred GWh of production at Moses Lake.

The big picture: AI's impact will eventually move from boosting knowledge work to changing the physical world through mobile machines like robotics, drones and satellites. 

All of those devices will rely on batteries, and many of these companies will seek a boosted battery and are willing to pay a premium for it. 

"I think what we're observing is the beginning of what will be the next cycle of AI impacting the economy," says Berdichevsky.

Sila CEO chats physical AI and its $1.4B loan award

Sila plans to build out capacity to make its silicon carbon anodes.

Illustration of a robot wearing a work jumpsuit and name patch that reads "0101".

AI&#x27;s growing impact on the physical world is giving next-gen batteries a boost, says Gene Berdichevsky, CEO of battery materials maker Sila.Why it matters: After the data center boom, the AI economy&#x27;s focus will shift to battery-heavy industries like drones, robotics and satellites.

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Sila CEO chats physical AI and its $1.4B loan award

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