Modern Hydrogen, a Seattle-area clean-energy startup once backed by Bill Gates, has laid off most of its workforce and halted key projects, leaving contractors anxious about unpaid invoices and raising fresh questions about the company’s future.
The privately held firm spent a decade developing technology that cracks natural gas to produce clean hydrogen and solid carbon, yet it now faces an abrupt downturn.
The company raised about USD$125 million and positioned its cracking device as a practical tool for industrial fuel switching. It also promoted its solid carbon as an ingredient for asphalt. Gates, who funded the startup and previously praised hydrogen’s range of uses, even tested the asphalt during a visit last year by patching a pothole with a shovel and wheelbarrow. Employees believed that kind of enthusiasm signaled long-term stability.
Modern Hydrogen did not publicly explain the layoffs. Company officials instead pointed business partners to what they called shifting funding conditions. They added that the company had begun a restructuring process. The size of the cuts remains unknown, though former staff say most employees lost their jobs.
The timing surprised partners. Modern Hydrogen had been preparing its first commercial-scale unit for a customer in Texas. It also completed two pilot demonstrations with utilities in Portland and Miami. Those projects validated its device, which splits methane into hydrogen fuel and solid carbon while preventing carbon dioxide emissions.
Read more: Plug Power strengthens european footprint with hydrogen supply to H2CAST project
Read more: Green hydrogen racing championship takes first step towards full electrification
Funding issues required a sharp reduction in operations
In January, the company signed a memorandum of understanding with Puget Sound Energy to seek industrial users that might switch to hydrogen. That list included steelmakers, cement producers, and pulp-and-paper plants that rely on very high temperatures. Employees thought this signaled a promising expansion. However, several partners say they learned of the layoffs only when work abruptly stopped.
One former policy manager said many in the field believed the firm was close to solving persistent challenges in the energy transition. He added that industry watchers had rooted for the team because its approach avoided most carbon emissions and produced a valuable byproduct.
On Oct. 30, chief financial officer Amir Moftakhar emailed subcontractors and vendors to halt all engagements immediately. He explained that modern funding conditions required a sharp reduction in operations. He also said the decision did not reflect the quality of the contracted work. Recipients now worry about unpaid invoices amounting to tens of thousands of dollars. Additionally, some contractors fear that liquidation or shutdown proceedings may complicate payment even more.
The company has not confirmed whether it will close its doors. It also has not explained what will happen to its equipment or patented processes. Meanwhile, staff who remain inside the firm have not spoken publicly. Observers note that the company’s silence leaves customers unsure whether their hydrogen plans need to shift.
Modern Hydrogen began in 2015 at Intellectual Ventures, a research hub founded by former Microsoft Corp (NASDAQ: MSFT) executive Nathan Myhrvold and supported by Gates.
Read more: Plug Power partners with U.S. data center developer to provide hydrogen power solutions
Read more: New green energy technique could kick lithium demand into high gear
Private sector confidence in green hydrogen shaken as enthusiasm wanes
Originally known as Modern Electron, the startup built devices that paired with home furnaces and water heaters. Those devices captured waste heat and turned it into electricity. The company pivoted in 2023 to focus entirely on hydrogen and renamed itself to reflect that mission.
Investors poured in capital during those years. Gates joined other backers such as NextEra Energy (NYSE: NEE), Miura, National Grid Partners, IRONGREY, Starlight Ventures, Valo Ventures and Metaplanet. The company had around 80 employees a year ago, according to LinkedIn data. Its former CTO, Max Mankin, left in January.
Hydrogen gained political momentum during the Biden administration as federal agencies funded new hydrogen hubs across the United States. Those programs signaled confidence in hydrogen as a fuel for heavy industry and long-distance transport. However, those commitments shifted under the Trump administration as several major climate programs were reduced or paused. Analysts say those shifts may have affected private-sector confidence. Furthermore, several investors grew cautious as interest rates stayed higher than expected.
Gates also published a memo on Oct. 28 that softened his earlier tone on climate urgency. He wrote that climate change would produce serious consequences, especially for poorer countries. He also wrote that humanity would still manage to live and thrive in most regions for the foreseeable future. Some observers interpreted that note as a sign of reduced investment appetite, though Gates has not commented on Modern Hydrogen’s workforce cuts.
.
Like Mugglehead on Facebook
joseph@mugglehead.com
