Climate Tech’s Unexpected Resilience in 2025
Despite predictions of its decline, climate tech investment has shown resilience in 2025. The expected downturn due to political shifts, such as efforts by President Donald Trump and the Republican Party to dismantle key climate policies of the Biden administration, did not occur. Additionally, the European Union’s easing of certain aggressive goals did not dampen the sector’s growth.
According to data from CTVC, venture investments in climate tech in the U.S. and Europe remained stable compared to 2024. This stability is attributed to the ongoing climate change threat and advancements in climate technologies that are becoming cheaper or superior to fossil fuel alternatives.
Significant cost reductions in solar, wind, and batteries have continued to propel the sector. Although not all technologies follow this trajectory, the opportunities for clean, cost-effective alternatives to fossil fuels are evident.
Data Centers’ Pivotal Role in 2026
The year 2025 marked a significant focus on data centers and their energy demands. In 2026, this focus is expected to grow, with data centers at the forefront of energy conversations. Investors, as surveyed by TechCrunch, largely agree that data centers will remain central to discussions in 2026.
Tom Chi, founding partner at At One Ventures, shared with TechCrunch, “They are creating their own financial ecosystem, and there is enough actual momentum in current AI efforts that I don’t see the hyperscalers pulling back in 2026.”
Lisa Coca, partner at Toyota Ventures, anticipates a shift in focus from power demand to resilience, emphasizing plans to decouple data centers from the grid to address concerns over rising electricity prices.
The Energy Landscape and Technological Advancements
Investors predict that geothermal, nuclear, solar, and battery technologies will benefit from the increasing power demands. Daniel Goldman, managing partner at Clean Energy Ventures, stated, “Zero-carbon generation is already among the cheapest sources of power, and growing demand for both grid-scale and distributed batteries is accelerating cost reductions faster than expected.”
Although there is speculation about an AI bubble, its impact on the energy sector remains uncertain. Kyle Teamey, managing partner at RA Capital Planetary Health, noted, “Could a bubble burst in 2026? Sure, but it’s not likely to affect infrastructure plans. The spending for 2026 is already budgeted. The train has left the station.”
Nuclear and Geothermal Energy: The Rising Stars
Nuclear startups have gained significant traction, raising over $1 billion recently, with many poised to go public in 2026. Nuclear power is currently in vogue, but it will take time to meet electricity demands. In the interim, solar and battery solutions are being utilized for their affordability and rapid deployment capabilities.
Geothermal energy is also expected to make significant strides in 2026, with enhanced geothermal technologies ready for larger-scale deployment. Joshua Posamentier, managing partner at Congruent Ventures, commented, “Geothermal will be hot on solar’s heels in terms of new generation.”
Future IPOs and Emerging Trends
Among the startups likely to go public in 2026, nuclear or geothermal companies are strong contenders, with Fervo, an enhanced geothermal startup, being a notable mention.
Beyond data centers, investor interest spans various technologies, including critical minerals, robotics, and grid management software. Amy Duffuor, general partner at Azolla Ventures, emphasized the importance of grid execution solutions, stating, “The quiet winners are companies that make interconnection, planning, and deployment faster.”
Original Story at techcrunch.com