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Tech companies are looking at various ways to manage the growing power demand of AI, Katie writes.

Why it matters: The soaring demand is both remaking energy markets and drawing outside criticism.

Driving the news: Salesforce released new suggestions today for policymakers around more sustainable AI, like requiring disclosure of the environmental impact.

Salesforce, which uses AI for its software, also suggested making AI-driven tech companies meet new energy efficiency standards.

In a separate and related announcement, Exowatt said it's raised a $20 million round from investors including OpenAI CEO Sam Altman and VC firm Andreessen Horowitz.

The startup, led by entrepreneur Hannan Parvizian, combines solar thermal tech with a thermal battery system and puts it in containers that can be deployed near data centers.

Like Salesforce, the Exowatt deal underscores AI's electricity demand and steps needed to keep the supply flowing and sustainable. 

Catch up quick: Tech companies have also started looking at other new strategies like buying data centers near nuclear power plants and investigating ways pumped hydro could help support storing energy for AI demand.

Companies like Amazon, Google and Microsoft have invested heavily into clean electricity for data centers, but with rising electricity demand and long queues for connecting solar and wind to the grid, the firms are being forced to rethink their strategies around how to get clean power.

Zoom in: Salesforce Director, Climate & Energy Megan Lorenzen tells Axios that "regulation has a critical role to play" for both environmental protections and for using AI to help with the climate crisis.

Salesforce is also asking policymakers to look at ways to use grants and tax incentives to support AI for the environment.

Bottom line: Tech companies are being forced to turn to creative measures to work on the difficult problem of finding new clean electricity.

1 big thing: OpenAI, Salesforce, and energy demand

an illustration of a robot hand holding a stem of green leaves

LanzaJet is raising roughly $100 million as it completes a production plant that promises to be the world's first to make sustainable aviation fuel from ethanol, Alan reports.

Why it's the BFD: The startup could produce a fuel that cuts aircraft emissions by as much as 80%.

Flashback: LanzaJet in February closed a $30 million investment from Southwest Airlines.

Driving the news: The company plans to close the funding round this quarter, a person familiar with the matter tells Axios.

The startup, a spin-off of carbon recycling startup LanzaTech, began raising at the end of 2023. It's aiming to achieve profitability in 2025.

Reality check: It'll be at least a decade, if ever, until ethanol-based fuel can compete on cost with conventional jet fuel without government incentives.

Zoom in: Ethanol subsidies, which back corn growers and influential agricultural giants, are among the most durable policy supports in Congress.

State of play: LanzaJet, based in Deerfield, Ill., is among a number of companies racing to produce sustainable aviation fuel.

Aircraft generate about 2.5% of global greenhouse gas emissions. Startups are looking to reduce that impact by producing fuel from bio-based feedstock such as ethanol, which is made from corn.

Others like Twelve and Air Company are pursuing more advanced technologies that would make fuel from captured carbon dioxide.

LanzaJet's first plant, in Soperton, Ga., would produce 10 million gallons of SAF and renewable diesel fuel per year.

The company in January celebrated the site's grand opening with production expected to begin this quarter.

Meanwhile, the company has announced additional projects overseas.

They include a UK effort with British Airways, one in India with national oil company Indian Oil, another in Japan with conglomerate Mitsui, and a project with Jet Zero Australia, backed by Airbus and airline Qantas.

How it works: LanzaJet is largely licensing its tech and providing project development support, rather than building most of the projects itself.

It's occasionally opening plants through joint ventures, such as the overseas projects with Indian Oil and British Airways. It also sells the catalyst ingredients needed to make fuel from ethanol and has developed a modular version of its biorefinery systems.

Each LanzaJet plant is funded separately, according to a source familiar. Plant project costs can range from $400 million to $1.5 billion.

2. The BFD: LanzaJet's $100M runway

Illustration of a gloved hand scrubbing an airplane contrail with a sponge

💰 GEF's new $325m: Private equity firm GEF Capital raised $325 million for its second climate fund, making control investments in lower mid-market companies in the U.S. and Canada in the energy, efficiency, waste and water sectors, the firm tells Alan.

The D.C.-based firm began raising in October 2021. It closed March 29 with investments from Blue Earth Capital, HQ Capital, ODDO BHF, INGKA Investments, Morgan Stanley Private Equity Solutions, GEM, Första AP-fonden, Quilvest Capital Partners, Granite Capital Management, and Nordea.

GEF plans to invest in eight to 10 companies through Fund II, writing checks of $25 million to $50 million.

It's so far deployed about half the fund's capital in six companies: building data provider Insite, cooking oil recycling service Lifecycle Renewables, ebike maker Murf, data center company Polargy, solar installer Civic Renewables, and LED lighting and efficiency provider Next Step Energy.

🍿 Earnings day at Tesla: Tomorrow is the equivalent of must-see TV in the EV world, as CEO Elon Musk and other company executives will face questions from analysts on an evening call after Tesla reports Q1 earnings, Ben Geman writes in Generate.

The biggest question is whether Tesla has indeed shelved plans for a mass-market ($25k) car.

The automaker has also seen deliveries plummet in Q1, it's cutting headcount by 10%, recalling Cybertrucks for sticky accelerator pedals, pursuing fresh price cuts — and all the while asking shareholders to bless a huge pay package for Musk.

3. Temperature check

a box of matches that pictures a small outline of the earth and text that reads "Temperature Check"

• Bay Bridge Ventures, a Berkeley-based VC firm, is raising $200m for a climate fund, per an SEC filing. https://axios.link/49HsqFW

• Spiber, a Japanese textile startup using fermented "brewed protein," raised $65m. https://axios.link/4d8YTYz

• Curio Legacy Ventures, a D.C.-based closed-loop nuclear fuel developer, raised $13.3m in seed capital: $7.5m in equity funding led by venture studio Synergos, and the remaining $5.8m from U.S. Energy Department grants, including a competitive ARPA-E award. https://axios.link/4d5aQ1j

• Infogrid, a UK-based software developer for decarbonizing real estate, raised $13m led by Keyframe Capital and A/O. https://axios.link/3vTkovT

• Another real estate decarbonization startup, Singapore-based Accacia, raised $6.5m led by Illuminate Financial, joined by AC Ventures and insiders Accel and B Capital. https://axios.link/4b92K6h

• Vitalfluid, a Dutch developer of "plasma activated water" as alternative to chemical pesticides and fertilizers, raised €5m from Future Food Fund, Graduate Entrepreneur Fund, Horticoop, and Innovation Industries. https://axios.link/3Jv8Dik

• Condoit, a Birmingham, Ala.-based SaaS developer for electricians, raised a ~$4.3m seed round led by The Westly Group, joined by Fontinalis Partners, Navitas Capital, C2 Ventures, Studio Management and wire and cable manufacturer Southwire. https://axios.link/4aV8vEg

• Italian startup Lithium Lasers raised €3.5m from Primo Space Fund and 360 Capital for materials processing. https://axios.link/3xJ4Vih

• Nuveen is raising up to $400m for a second climate fund, with around $150m already committed, per an SEC filing. https://axios.link/4aEhtpQ

• CVC Capital Partners set an IPO range that could value the private equity firm at up to $16b, with plans to begin trading Friday in Amsterdam, Dan Primack writes in Pro Rata. https://axios.link/3vRvUIc

• Investors led by UK-based Sarasin & Partners filed a resolution pushing Norwegian energy giant Equinor to bring its strategy in line with the Paris climate agreement. Equinor's board is urging shareholders to reject the proposal. https://axios.link/3U9DDcH

• Faraday Future Intelligent Electric received a letter from Nasdaq that it's out of compliance in failing to file its Form 10-K for 2023. https://axios.link/3Jx797f

• Utility Eversource Energy executed the sale of its 50% stake in 924 MW Sunrise Wind off Martha's Vineyard to developer Ørsted. https://axios.link/3Q91RCI

• Proemion Holding, a data provider for mobile industrial assets, agreed to acquire industrial analytics company TrendMiner from Software AG. https://axios.link/4488YRm

• ArcelorMittal Calvert received $280.5m in 48C investment tax credits from the Inflation Reduction Act Section as it prepares to build an electrical steel plant in Calvert, Ala. https://axios.link/3Jujwkw

• LS GreenLink USA, a Delaware subsidiary of South Korean cable manufacturer LS Cable & System, received $99m in 48C investment tax credits as it plans to build a U.S. factory. https://axios.link/3xKdqKf

• The U.S. Trade Representative pressured Mexico's government to stop offering generous incentives to Chinese automakers, per Reuters. https://axios.link/4aHJkp1

• Solar manufacturer Maxeon Solar Technologies is suing rival Hanwha Q Cells and REC Solar in the Eastern District of Texas alleging patent infringement related to passive solar cell technology. https://axios.link/3UrQ9Fv

• American Battery Technology completed construction and started commissioning of its lithium hydroxide pilot plant in Nevada. https://axios.link/4dbclLt

• Isometric, a London-based carbon removal registry backed by Lowercarbon, issued its first credits, to the Stripe-led fund Frontier. https://axios.link/3Ur2QAB

• Divert, a Concord, Mass.-based food-waste-to-energy developer, purchased a site in Lexington, N.C., to build a food-waste-to-energy plant. https://axios.link/4b2ZJV1

• Ohmium, a Newark, Calif.-based electrolyzer manufacturer, is working with Chilean company H2 Green Mining to develop green hydrogen projects to decarbonize mining. https://axios.link/3xVN4Vp

• GM plans to incorporate bidirectional charging with its EVs, starting with its 2024 Chevrolet Silverado pickup. https://axios.link/444eAfr

• Nissan plans to begin producing EV solid-state batteries in 2025 and reach scale by early 2029, per Reuters. https://axios.link/3JnC9GC

• Dutch high-end ebike maker VanMoof is selling ebikes again. The company was acquired last year by McLaren Applied after going bankrupt. https://axios.link/4b2WSeP

• Vietnamese EV maker VinFast has added an ebike to its U.S. vehicle lineup. https://axios.link/3UllidY

• Aptera, the San Diego-based startup designing a solar-powered three-wheeled EV, received its first production-ready chassis. https://axios.link/4d7l2GD

• Impossible Foods is converting a cattle ranch in South Carolina into a "ranch" — aka a farm — for its plant-based proteins. https://axios.link/3w1gTn8

• A Tesla driver threatened to call the police on a Rivian driver trying to use a Tesla Supercharger site. https://axios.link/3xGvzIC

4. Hot deals

• Jennifer Li was promoted to GP at Andreessen Horowitz to oversee the firm's $1.25b infrastructure fund alongside GP Martin Casado. Li was previously an investing partner. https://axios.link/3xLWRgV

• Pete Lamson was named COO of Volition Capital, a Boston-based growth equity firm with sustainability investments in Assent, Grove, RTS and Super73. https://axios.link/4d3UG8p

• Radha Badani and Eric Townsend joined GEF Capital, the D.C.-based private equity firm, as operating partners. Badani was previously a partner at Chameleon Collective; Townsend was CEO of Bluesource, which was acquired by TPG Rise in 2022.

• Guillaume Baxter was promoted to partner at French VC firm Sofinnova, where he'll focus on industrial biotech and renewable chemistry. Baxter was previously a principal. https://axios.link/4b7mkQq

• Kate Henningsen was named CEO of InfoGrid, the UK-based software developer for decarbonizing real estate that just raised $13m (above). Henningsen was co-founder and COO of Arcadia. https://axios.link/446bojH

• Natalie Chesko joined Essential Utilities, a Bryn Mawr, Pa.-based water and wastewater utility, as president of Aqua New Jersey. Chesko was previously executive director of the Hamilton Township Municipal Utilities Authority. https://axios.link/3vUsa8O

• Adam Wadecki was promoted to SVP and controller of Eaton, the Ireland-based power management control provider. Wadecki was previously SVP of internal audit. https://axios.link/4aPlKH5

• Gerard Cunningham joined the board of Stem, an SF-based energy software provider. Cunningham was a partner at McKinsey. https://axios.link/49KklAd

• Todd Kantor, Tore Ivar Slettemoen and David Manners joined the board of Freyr Battery, the Oslo-based battery cell manufacturer building a site in Georgia. https://axios.link/4aLQ1GE

5. It's personnel

🌊 What we're watching: A deluge of Earth Day announcements — some substantive, others definitely not. We'll get through this together.

👋 Katie is looking forward to SF Climate Week kicking off today. Hit reply to send me a note to meet up!

🥩 Alan last week got talked into buying a 17-pound brisket. Yes, in hindsight, a mistake. But, after going back to the butcher shop to get them to cut the Fred Flintstone-size slab of beef in half, Alan plunged ahead with his first oven-brisket for an early Passover seder. The result: a big success. He's stoked to make it again for another seder this weekend.

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and AI energy suppliers.

April 22, 2024

1 big thing: OpenAI, Salesforce, and energy demand