New York Climate Week was dominated by artificial intelligence, a shift that has left some in the climate sector unhappy.
While many worry about the natural gas plants being built to power AI data centres, most climate tech startups have welcomed the development. These companies, often focused on energy, see the construction boom as a way to survive their early funding struggles.
That singular focus risks ignoring other promising areas.
This trend has been building for a year. As climate companies faced trouble securing money due to cancelled federal grants and investor hesitation, those willing to adjust their pitches to fit the AI narrative succeeded.
The pivot has helped many startups secure fresh capital. Total venture deal value has risen for four consecutive quarters, hitting $14 billion in the first quarter of this year, according to PitchBook. This is the best fundraising environment for climate tech in recent years. Most of the deal value comes from sectors boosted by data centre construction, including the built environment, grid infrastructure, and dispatchable energy that can be turned on or off when needed.
It is an opportunity few want to miss.
During a panel at New York Climate Week, two founders were asked if they preferred the AI buildout to proceed at its current pace or a more climate-responsible speed. They answered without hesitation that faster was better. Both of their startups were in energy.
Not everyone agrees.
Several founders told me the data centre boom is distracting from other promising segments of climate tech, including those meeting targets without relying on AI mania.
“Corporates are still interested in climate,” one founder said. The difference today is that large companies do not want to crow about it, mostly for fear of drawing the Trump administration’s ire.
There were also signs 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.
“Where was this money three years ago?” I asked several people. I received more than a few knowing eye rolls in reply.
It is the world they live in these days, they acknowledged. The smart entrepreneurs are all finding ways to meet customers where they are.
Ultimately, the undercurrent at New York Climate Week was that the data centre party will not 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.
What it means
For those building climate solutions, the immediate priority is adapting to the current funding landscape. Teams must align their narratives with the AI buildout to secure capital now. However, the focus must eventually return to the core mission of reducing carbon emissions once the current market frenzy settles.
