Is funding drying up for AI-run vertical farms?

The pitch for vertical farming had all the promise of a modern venture capital dream: a new way to grow crops that would use robots and artificial intelligence to conserve water, combat food insecurity and save the environment.

But after firms poured billions of dollars into these startups, pushing valuations into the stratosphere, the industry is now facing a harsh new reality: funding is drying up, profits remain elusive, and creditors are circling. AeroFarms last week became the latest, most high-profile example of the challenges facing the business, filing for bankruptcy after building a massive new facility in Virginia that drained its cash, according to court papers.

AeroFarms’ bankruptcy came on the heels of lettuce grower Kalera also filing for court protection in April, and a notice of default for publicly traded AppHarvest a month later, according to a regulatory filing.

“We really were in a hype cycle,” said Vonnie Estes, vice president of innovation for the International Fresh Produce Association. “There was a lot of money that rushed in without really understanding that this is actually just farming.”

Industry experts still say that indoor farming is a crucial piece of agriculture’s future, especially as climate change spurs more destructive wildfires and floods. Nonetheless, the ability of vertical farms to carve out meaningful market share on a national scale could be years away, they note.


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