Climate tech startups are adapting their strategies amidst a changing political and economic landscape. Companies that once focused on reducing fossil fuel dependence are now emphasizing national security and AI applications. This shift comes as support for climate action wanes, with the Trump administration promising to boost oil and gas production and potentially cut green funding. Tough financial conditions, including higher interest rates and a 40% drop in climate-tech equity funding in 2024, are also driving the change. Companies like Magrathea Metals, which extracts magnesium from saltwater, are now highlighting the importance of securing domestic supply chains for materials used in military applications. Brimstone, a low-carbon cement startup, is positioning itself as a champion of domestic manufacturing, even referencing national security concerns related to aluminum production. Venture capitalists note that many companies are “relabeling” themselves to adapt to the new environment.
A wave of companies initially founded to combat climate change by reducing reliance on fossil fuels are now strategically recalibrating their messaging to align with current geopolitical and economic realities.
Startups that once emphasized the environmental benefits of their innovations in areas like metal production, cement manufacturing, and alternative fuels are increasingly highlighting how their products bolster national security in an era of escalating global trade tensions. Others are exploring opportunities within the rapidly expanding artificial intelligence sector.
These pivots are occurring as the economic and political tailwinds that once favored climate-focused initiatives have weakened. Many of these companies launched during a period of strong alignment between economic incentives and climate action.
The Trump administration’s stated intentions to increase fossil fuel production, roll back environmental regulations, and potentially halt the Biden administration’s green funding programs have created uncertainty. Even prior to the election cycle, numerous companies had already begun to scale back their environmental commitments in response to pressure from investors and political figures.
Furthermore, the current financial climate presents significant challenges. Elevated interest rates have made it more difficult to justify the substantial capital investments required for many green technology projects. According to BloombergNEF, equity funding for climate-tech startups experienced a 40% decline in 2024, reaching $50.7 billion, marking the third consecutive year of decreasing investment.
“There’s a significant amount of introspection and anticipation of future trends,” said Jacob Bro, a partner at venture capital firm 2150. “Companies are already subtly adjusting their branding.”
Magrathea Metals, a company pioneering a method for extracting magnesium from seawater, exemplifies this shift. Previously, the Oakland, California-based startup prominently featured the decarbonization advantages of its technology on its website. These references have now been removed. Instead, the company emphasizes the critical national security implications of limited domestic magnesium production, positioning Magrathea as a solution to secure the supply of this vital material for applications such as military aircraft and drones.
“Our primary objective is to liberate the Western magnesium supply chain from its dependence on China,” stated CEO Alex Grant. While Magrathea’s potential clients, such as automotive manufacturers, remain committed to reducing emissions, the immediate threat of supply chain disruptions has become a higher priority, he explained.
Brimstone, a startup focused on producing low-carbon cement, is similarly reframing its mission as a proponent of domestic manufacturing.
In January, Brimstone announced that its inaugural plant would also produce alumina, a crucial component in aluminum production. The announcement featured an image of a fighter jet and referenced a Commerce Department report from the Trump administration’s first term, which identified China’s dominance in aluminum production as a national security concern.