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The slowdown in sales of electric vehicles has led to smaller and postponed orders for next-generation batteries. But some next-gen battery makers are eyeing a lifeline from an unexpected source: artificial intelligence.

AI-enabled smartphones and data centers housing AI servers both need large, fast bursts of energy, precisely what silicon anodes deliver.

Group14 Technologies of Woodinville, Wash., has locked up one deal. Next month, Honor, China’s fourth-largest smartphone maker, will begin selling the $1,479 Magic 7 Pro, an AI-enabled phone equipped with Group14’s anode, in Europe. Among the phone’s features will be Yoyo Agent, a personal AI assistant that Honor says trains on its user’s habits and can fulfill a task such as ordering coffee or buying a plane ticket with a simple request rather than requiring several steps.

The phone also includes a souped-up camera that can detect deepfakes, and a slew of other AI-powered features that require lots of energy, especially given widespread user expectations of a daylong battery, something silicon anodes also provide. Hence the Magic 7 includes a Qualcomm Snapdragon, an especially energy-efficient chip designed for AI-enabled devices. But the chip apparently isn’t efficient enough to run all the AI features installed on the phone, so Honor also included Group14’s silicon anode, which holds more lithium than a conventional graphite anode and thus adds 20% more energy.

For a couple of years, Group14 had been expecting its anodes to be installed in some Porsche EVs this year. Now the anodes likely won’t go into the German carmaker’s EVs before 2026 or 2027, said Group14 CEO Rick Luebbe.

In the meantime, Group14 is earning revenue from Honor, though Luebbe declined to disclose how much. Porsche and Honor did not respond to emails.

Group14 is not alone: Gene Berdichevsky, CEO of Sila Nanotechnologies, which also makes next-gen silicon anodes, said he is in negotiations with the makers of AI-enabled phones. Any deal he is able to conclude would help tide his company over until later this decade, when EV prices are likely to be far lower, models much improved and sales higher. Speaking to analysts in October, Raj Talluri, CEO of Fremont, Calif.–based Enovix, a maker of silicon-based batteries, said AI-powered phones were “driving significant pull for our products and the transformatory leap in energy that we can provide.”

Most Western next-gen battery makers have been struggling for at least 18 months, mired in the “valley of death,” the period between the creation of a prototype and its commercialization at large scale, as we have reported. More recently, companies have started to fail: Last month, the best capitalized of the battery startups—Sweden’s Northvolt—declared bankruptcy, signaling just how dire conditions are.

The frenzy over AI is unlikely to be a long-term savior for U.S. and European battery startups—the revenue on sales of tiny phone anodes won’t be large enough—but it looks like perhaps a medium-term life preserver for some of them. “If you look at what the path is for the more advanced AI chips, they are just getting more and more power hungry,” Group14’s Luebbe said. “So the problem is not getting better, it’s getting worse with each step in technology.”

The Battery’s AI Play

The AI play in batteries isn’t only about smartphones. AI data centers housing thousands and often tens of thousands of graphics processing units consume a lot of power; so prodigious is their energy appetite that Amazon, Google and Microsoft are attempting to use nuclear plants to power future data centers.

Luebbe says next-gen lithium-ion batteries can help handle the load. Data center operators can draw power from the grid while they train their AI models. But when the models need updating, the data centers require massive one- or two-minute surges of power multiple times a day, said Venkat Viswanathan, an expert on energy storage and machine learning at the University of Michigan.

Molicel, a Taiwan-based battery maker highly respected in the West, is using Group14’s anode in the P50B, a battery designed for AI data centers. Its batteries—placed directly in racks containing the AI servers—can provide energy in fast bursts matching the one- to two-minute requirement, Luebbe said.

​​Last month, Robin Zeng, CEO of Contemporary Amperex Technology Ltd., the world’s largest lithium-ion battery maker, told Reuters that demand for batteries in data centers and other uses could be 10 times that for EVs. Zeng said CATL would develop battery systems for data centers for AI companies.

Qichao Hu, CEO of lithium-metal anode developer SES AI, said data center operators had asked him to develop electrolytes that could extend the life of data center batteries. In the round-the-clock use of batteries in data centers, especially if they are located in cold climates, lithium can gum up the anode—what is called lithium plating—and cause the battery to fail, Hu said.

SES scientists found that a variant of the solvent-in-salt electrolyte they were already using in their in-house lithium-metal battery hindered the plating to some degree; they have since been looking for other electrolytes using the company’s AI models. “The rise in demand for data center storage is really exciting,” Hu said.

But smartphones appear to be the largest AI play for the next-gen battery companies while they wait for EV sales to improve. In Enovix’s second-quarter call with analysts in July, CEO Talluri said smartphone company representatives had asked him whether Enovix could increase the energy capacity of its batteries beyond the usual 5 ampere-hours, allowing them to run longer, handle more programs and generally work with the AI features; they wondered if Enovix could make them 6 Ah but in the same size battery—about the dimensions of a playing card, taking up much of the space in a smartphone.

Three months later, Talluri said during Enovix’s third-quarter call in October that the same smartphone representatives had upped their request: Now they wanted 7 Ah in the same space.

Can you give them 7 Ah, and if so, when? one analyst asked Talluri. He did not respond to messages for this column.

“We are actually talking about next year,” Talluri replied to the analyst. “And I actually think the ask is going to keep going up if we can produce higher and higher energy capacity batteries in the same footprint. Because the applications we see now are just taking more and more power from the battery.”