12 Investors Share Insights on Climate Tech’s Future in 2026
As 2026 approaches, experts weigh in on the evolving landscape of climate tech investments
San Francisco: This year was forecasted to signal the demise of climate technology. With the former Trump administration making strides to undo key Biden initiatives and the European Union softening its progressive climate goals, many expected a downturn.
But as 2025 wraps up, the data tells another story. Rather than a decline, investments in climate and clean energy in the U.S. and Europe remained stable, contrary to doomsday predictions from critics. This resilience springs from the ever-pressing threat of climate change and the increasing competitiveness of clean technologies against fossil fuels.
Solar, wind, and battery innovations have surged in cost-effectiveness, charting a promising course for the future of climate tech. Not every technology will thrive, but the narrative suggests fossil fuels are not the only option available. Opportunities to back cleaner alternatives are very much alive.
The Rise of Data Centers
Last year’s predictions hinted that 2025 would be when climate tech fully embraced the potential of AI and its power needs, and that trend held true. Access to affordable clean energy remains pivotal for the climate tech sector.
Investor sentiment around data centers has intensified, with those surveyed almost universally acknowledging their central role in the coming year. “They’re crafting a financial ecosystem of their own, and the current momentum in AI means I’m not expecting hyperscalers to scale back in 2026,” said Tom Chi, co-founder of At One Ventures.
Po Bronson from SOSV’s IndieBio echoed this, remarking on the daily discussions surrounding data center momentum in corporate meetings. “Every meeting backs the narrative of an ever-increasing focus on data centers,” he pointed out.
While 2025 saw data centers fixated on securing reliable energy sources, Lisa Coca from Toyota Ventures predicts a shift in priority for 2026. “The coming year will spotlight resilience and the urgency to reduce reliance on the grid,” she explained. This shift might mitigate some resistance from grid operators and the public concerned about rising electricity costs triggered by increased demands.
The need for additional power remains, however, and a plethora of alternatives—like geothermal, nuclear, solar, and batteries—have garnered investor interest in the wake of this development. “Zero-carbon generation has already become one of the cheapest power sources, while the escalating demand for batteries is driving down costs faster than anticipated,” noted Daniel Goldman of Clean Energy Ventures.
Yet investors are cautious, acknowledging the possibility of an AI bubble burst. Kyle Teamey from RA Capital Planetary Health raised a critical point: “Could 2026 see a bubble burst? Certainly, but it won’t derail infrastructure plans—the budgets are already set.”
Andrew Beebe of Obvious Ventures shared a similar sentiment, suggesting that, while a data center bubble might burst in 2026 or early 2027, the market for electricity generation remains robust. “We are still going to need a significant increase in power, and we will use it,” he emphasized.
The Quest for Reliable Power
The influx of new data center projects over the previous year has injected fresh energy into startups, particularly those in the nuclear sector. Recent announcements from this field reveal over $1 billion in new funding, igniting speculation that many are primed for public listing in 2026.
Some investors believe geothermal power is positioned to step up in response to growing energy demands. “Geothermal will accelerate quickly, close on the heels of solar,” said Joshua Posamentier from Congruent Ventures. “With limited new capacity in turbine manufacturing, the future lies ahead for geothermal energy.”
While AI continues to escalate demand, businesses venturing beyond data centers may find the most success. Laurie Menoud from At One Ventures noted, “Data centers drive some demand, but they don’t represent the entire market.”
Looking Ahead: Potential IPOs
Opinions varied when discussing which startups have the best chances of hitting the public market in 2026. Notably, several industry players placed their bets on nuclear or geothermal firms. Fervo, a rising star in enhanced geothermal, frequently emerged as a frontrunner. Recently, it secured a $462 million investment and is working on a 500-megawatt facility in Utah—projected to set a benchmark for future developments.
Technological Trends to Monitor
Beyond data centers, investor interest branches into critical minerals, robotics, and software that manages electric grids. “We should be focusing more on grid execution as a pivotal sector,” asserted Amy Duffuor from Azolla Ventures.
Resiliency and adaptability emerge as themes shaping 2026, with experts exploring innovative tactics. Anil Achyuta at EIP highlighted an interesting application: using robots to bury electrical lines efficiently, reducing wildfire risks while enhancing grid stability.
Beebe from Obvious Ventures pointed to electric trucking as another sector to watch. “The unveiling of the Tesla Semi will redefine the industry; its specs will revolutionize this space as significantly as the Model S or 3,” he stated.
AI stands poised to propel climate tech forward, merging with the physical realm and igniting innovations across sectors. “Expect transformational breakthroughs where AI intersects with hardware and infrastructure in 2026,” suggested Matt Rogers, founder at Incite and Mill.
Still, caution is warranted. Bronson from SOSV noted, “When investors exhaust interest in a sector and assume it won’t yield results, that’s often when true innovations emerge.”