Investment managers who back green technology companies are preparing to increase their investments this year, guided by clearer rules and lower borrowing costs, even as they face higher standards for where to put their dollars.
Trump’s policy decisions, the growth of artificial intelligence, and the spread of electric systems, all forces that shaped where money went in 2025, will continue to influence investment choices this year. Companies seeking funding will need to show they can make money, not just reduce carbon pollution.
Where investors see opportunity
Most investors agree that companies that serve data center energy needs look like good bets, despite worries about an AI bubble. This includes startups working on new types of underground heat power, companies developing renewable energy projects, and software makers improving energy efficiency.
Energy use at US data centers is expected to jump 130% by 2030 compared to 2024 levels, according to the International Energy Agency. Even if only half of that predicted growth happens, it remains a “huge opportunity,” said Rajesh Swaminathan, a partner at Khosla Ventures.
There’s another reason to feel positive: growing chances to buy clean energy companies whose values have dropped, according to Hans Kobler, who founded and runs Energy Impact Partners.
Investors also can’t get enough of companies working on power grid technology. The Nasdaq’s main grid index beat other major stock measures with nearly 30% gains in 2025. But even after such a strong performance, investors say they want more grid tech stocks.
US grid investment hit $115 billion, about a quarter of the worldwide total, last year, and that number should climb to more than $128 billion over the next two years, according to BNEF.
There will also be “more appetite” for funding projects that help communities prepare for disasters as climate change makes severe weather worse, said Jens Peers, who oversees sustainable stock investments at Mirova US.
In the US, getting ready for disasters and recovering from them is already a major business. A group of about 100 large public companies working on disaster preparation and response beat the S&P 500 by 6.5% per year from October 2015 to October 2025, according to Bloomberg Intelligence.
Nuclear power startups received about one-fifth of all climate venture funding during the first nine months of 2025, and publicly-traded nuclear companies enjoyed rising stock prices, driven largely by the technology’s potential to meet AI energy demands. But investor feelings are mixed about whether the sector remains a good bet in 2026.
The surge in prices for nuclear companies has some investors uncertain. Since the basic business facts of many nuclear stocks can’t justify their prices, the need to “pivot away is pretty obvious,” said Garvin Jabusch, who oversees investments at Green Alpha Advisors.
But some of the biggest climate tech investors remain committed to the sector, especially fusion. Tech billionaire Chris Sacca’s venture company is raising a new fund set aside for nuclear fusion. Swaminathan from Khosla Ventures said his team will also “double down” on nuclear investment in 2026. While admitting the sector has become very hot, he said “the valuation today is very, very reasonable” given what’s possible.
The growing industry has also attracted some unexpected newcomers. Trump Media & Technology Group Corp., the company behind the president’s social media platform, announced in December it would combine with nuclear fusion startup TAE Technologies in a surprising deal valued at more than $6 billion.
Where investors are backing away
US-based companies making alternative protein saw major investor pullback in 2025, with venture funding for cell culture technology down about 90% compared to the previous year, according to Pitchbook. And they’re unlikely to see things improve this year.
“It is a challenging place to invest in,” said O’Sullivan, whose company has funded many alternative protein makers but has become increasingly careful about supporting more.
Some agricultural technology areas, like automation and exact farming methods, will likely see investor support because of ongoing worker shortages and farmers wanting to cut costs. But the funding situation is “really challenging” for many others in sustainable agriculture, said Josh Posamentier, who helps run Congruent Ventures.
Company buyouts for US crop farming dropped to zero in the first nine months of 2025 from $38 million the year before, according to BNEF. That came after the sector’s buyout deals already fell by nearly 97% in dollar terms in 2024 from 2023 levels.
Claim your free seat in an exclusive crypto trading community – limited to 1,000 members.
