Climate Venture Firm Leaning Into AI With New $150 Million Fund
(Bloomberg) -- Five years after Transition Ventures was founded to back early-stage climate startups, the London-based venture capital firm has raised a new $150 million fund, with a focus on power, artificial intelligence, robotics and critical materials.
The growing focus on AI shows how quickly investors have shifted their attention from environmentally friendly technology to the expected massive power demands data centers will need.
Transition was founded around the peak of the clean tech investment wave, which in 2022 saw $128 billion pour into startups intent on mitigating climate-harming emissions or improving the health of the planet, according to BloombergNEF. Then artificial intelligence took off, and with it a surge in electric demand from data center projects.
“Data centers were already a big thing and now, with AI, it’s exploding,” said Transition partner David Helgason, a co-founder of game software developer Unity Technologies Inc. “How to fit more compute inside the materials we have, the energy we have, has become a critical thing.”
Climate tech investment is on track to reach $89 billion in 2026, according to BNEF, but with more of that money pouring into firms that support the AI infrastructure boom. Those include startups that provide clean, reliable power for data centers, like geothermal company Fervo Energy Co., which raised $1.89 billion in one of the year’s largest energy IPOs.
For its part, Transition has backed firms that address bottlenecks in the data center buildout, Helgason said. Those include Olix Computing Ltd., a startup developing faster AI chips, and Invisix, a firm working on semiconductor metrology.
Other climate-focused startups that don’t have an AI thesis haven’t fared so well. Those include the Transition-backed Running Tide, an ocean-based carbon removal startup that went bust in 2024, citing insufficient demand in the voluntary carbon market.
“Running Tide still gives me PTSD to think about,” Helgason said. “It was very hard to sell into that market that kind of solution.”
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