Gigascale
Climate-focused venture funds had a rough time raising money last year, but the sector is finding an unlikely source of momentum: the same AI boom that’s reshaping every other corner of tech investing.
Fundraising for climate-specialist VCs dropped nearly 40% in 2025 compared with 2024, according to PitchBook data. Yet the mood among investors in the space has shifted from defensive to opportunistic, driven largely by the enormous energy demands of AI infrastructure.
“AI I think is both a headwind and tailwind for the space, but more a” tailwind, said John MacDonagh, a senior research analyst at PitchBook. The logic is straightforward: data center developers racing to power AI workloads need energy sources fast, and that urgency is spilling over into demand for renewables, storage, and grid technologies that climate investors have backed for years.
Mike Schroepfer, founding partner of Gigascale Capital, raised $250 million for a climate-focused fund announced in June, capital he’s careful not to rebrand as an AI play despite the obvious overlap in interest. “Our most frequent co-investors are generalists or follow-on investors,” he said, pointing to how mainstream tech capital is increasingly flowing alongside dedicated climate funds rather than staying separate from them.
Dawn Lippert, founder and CEO of Earthshot Ventures, described a similar pattern at her firm: “90% of the companies that Earthshot backs have generalist tech investors as” co-investors. She argued that specialist climate investors still play a distinct role in these deals, pressing founders on environmental and social impact questions that generalist investors often don’t think to ask.
The result is a sector that has gone, as one analyst put it, from nearly unsayable to heating up again in the age of AI, with energy, critical minerals, and supply chain investments now attracting capital at a scale the space hasn’t seen in years.
