RISING TIDES
Observations from the IMC Research Process

Gridlock Ahead: Batteries Take the Wheel in the AI Era

Global battery capacity is set to jump 67% this year to 617GWh — and grow tenfold by 2035, according to BNEF. The driver isn’t EVs anymore — it’s AI’s appetite for power.

• The Power Squeeze: Data centers are scaling faster than the grid. Utilities face multi-year delays in generation and transmission, while AI demand compounds exponentially. The result: a looming energy deficit already visible in soaring utility and nuclear valuations.
• Charging for the Future: Enter industrial batteries. Batteries now make up 23% of new US grid capacity, second only to solar. The US and China dominate the market, accounting for about 70% of projects. Batteries are also playing a growing role in Australia and the UK, and countries from Chile to Saudi Arabia are announcing plans to ramp up deployment.

“The US grid is capable of 1 TW steady state, but average usage is about 0.5 TW. Run the power plants at night to charge up the packs and then discharge packs during the day to power AI.” – Elon Musk

• The New Energy Stack: Bloom Energy ($BE) brings solid-oxide fuel cells; Eos Energy ($EOSE) is scaling zinc-bromide storage with Tetra Technologies ($TTI) as a key materials supplier. Energy Vault ($NRGV) offers a novel gravity-based storage system that uses electricity to lift heavy blocks, then releases that potential energy to generate power on demand—providing a durable, low-cost alternative to lithium-ion. Nextracker ($NXT) rounds out the ecosystem with the backbone hardware for deployment.

Momentum is shifting from the cloud to the grid — and batteries are the bridge.