Sunrun, a provider of home battery storage, is working with Tesla to meet the energy needs of AI data centers
Tesla is working with Sunrun and Renew Home on a new initiative to provide power for AI hyperscalers and utilities. Sunrun also offers customers access to Tesla's Powerwall home energy-storage solutions.
Shares of Sunrun, the home solar-panel and battery-storage provider, are surging as investors consider the company's ability to play a more substantial role in the expensive artificial-intelligence buildout.
Sunrun (RUN) on Wednesday said it would work with Elon Musk's Tesla $(TSLA)$ and the energy-management platform Renew Home to deliver more than 16 gigawatts of flexible energy capacity to hyperscalers and utilities.
That power draws on hundreds of thousands of home battery systems operated by Sunrun and Tesla, plus capacity from more than 8 million smart devices managed by Renew Home. The companies said they would together form the "largest distributed power plant" in the United Sates.
"When data centers are asked to throttle down operations during the most expensive and stressful hours of the day, we can activate our distributed power plants to help provide them the power they need," Sunrun CEO Mary Powell said in a statement. Powell said the collaboration could also help keep residential energy bills from rising.
Hyperscalers have committed to expensive plans to develop new AI infrastructure. But high energy costs associated with new facilities, such as data centers, have the potential to increase residential ratepayers' bills.
That's why several major AI firms, including Microsoft $(MSFT)$ and OpenAI, have announced plans to limit their impact. President Donald Trump in February also announced a "ratepayer protection pledge" to protect Americans from AI-driven power costs, although the execution is unlikely to be simple, according to experts.
Sunrun shares were up 24% as of Wednesday afternoon, partially offsetting substantial year-to-date losses. The stock had taken a huge hit after a better-than-expected earnings report released in late February was overshadowed by cautious guidance for 2026.
Tesla shares, meanwhile, were down more 1% on Wednesday, despite the partnership. That comes after a nearly 6% drop on Tuesday that aligned with a broader tech selloff, as well as investor jitters over a fatal crash involving one of Tesla's electric vehicles.
The company has been sued in the district court of Harris County, Texas, by the family of a woman who was killed when a Tesla crashed into her home near Houston. The National Transportation Safety Board and the Harris County Sherriff's Department are investigating the incident, the NTSB said Wednesday.
The National Highway Traffic Safety Administration is also looking into what happened. The driver of the Tesla told officials that he had engaged the vehicle's automated driving-assistance system, according to the Wall Street Journal.
"[T]his makes no sense," Musk said in a post on X on Tuesday. "FSD drives slowly through neighborhood streets and this was a high speed crash!" He was referring to Tesla's Full Self-Driving (supervised) system.
Ashok Elluswamy, Tesla's vice president of AI software, said on X that the driver had manually overridden the system by "by pressing the accelerator all the way to 100%."
The latest controversy involving Tesla's technology could hamper its plans for expansion. It uses a variant of FSD for its robotaxi operations, and boosting adoption among consumers is also a priority for the company.
Tesla is seeking to win broader regulatory approval for the system in both China and the European Union. The company reported 1.28 million active FSD subscriptions at the end of the first quarter, for a year-over-year increase of 51%.
"Regulatory ratification of FSD meaningfully enhances the value proposition of a [Tesla] vehicle," J.P. Morgan analyst Rajat Gupta said in a note to clients on Wednesday.
Gupta, who recently began covering Tesla for J.P. Morgan, rates the stock at neutral with a $475-per-share price target, implying upside of 27% from current trading levels.
-William Gavin
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June 24, 2026 14:28 ET (18:28 GMT)
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