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Power & Digital Infrastructure Acquisition
II Corp.

321 North Clark Street, Suite 2440

Chicago, Illinois 60654

October 2, 2023

VIA EDGAR

    Attention:
    Laura Veator

    Stephen Krikorian

    Austin Pattan

    Jan Woo

Division of Corporation Finance

Office of Technology

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549-3561

    Re:
    Power & Digital Infrastructure Acquisition II Corp.

    Registration Statement on Form S-4

    Filed August 9, 2023

    File No. 333-273821

Ladies and Gentlemen:

This letter sets forth the
response of Power & Digital Infrastructure Acquisition II Corp. (the “Company”) to the comments of the staff
of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
set forth in your letter, dated September 6, 2023, with respect to the above referenced Registration Statement on Form S-4 (the “Registration
Statement”). Concurrently with the submission of this letter, the Company is publicly filing Amendment No. 1 to the Registration
Statement (the “Revised Registration Statement”). Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Revised Registration Statement. Set forth below is the Company’s response to the Staff’s
comments. For the Staff’s convenience, we have incorporated your comments into this response letter in italics.

United States Securities and Exchange Commission

October 2, 2023

Page 2

Registration Statement on Form S-4 filed August 9, 2023

Questions and Answers

What vote is required to approve each proposal at the special
meeting?, page xvii

 1. Given that the Initial Stockholders, the Sponsor and XPDB’s directors have agreed to vote in
favor of the proposals, please specify the percentage of votes by public or non-affiliated holders required to approve each of the proposals.

RESPONSE:

The Company respectfully acknowledges the Staff’s comment and
advises the Staff that it has revised the disclosure on pages xvii, xviii, 3, 47 and 71 of the Revised Registration Statement.

Do any of XPDB’s directors or officers have interests in
the business combination, page xviii

 2. Please revise to include the effective purchase price paid by the Initial Stockholders for the Founders
Shares, both in the aggregate and on a per share basis.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on pages xix, 4, 72 and 166 of the Revised Registration
Statement.

 3. We note that you reference the reimbursement for out-of-pocket expenses incurred in connection with
activities on your behalf such as identifying potential target businesses and performing due diligence on suitable business combinations,
advisory fees and consulting fees that will be paid to XMS Capital and TEP. Please revise to quantify the aggregate dollar amount of the
fees due to XMS Capital and TEP. Similar revisions should be included in your discussion of related party transactions.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on pages xix, 4, 103, 106, 110, 118, 167 and 208 of
the Revised Registration Statement.

 4. We note that TEP, an affiliate of the SPAC Sponsor and a minority investor in Montana Technologies,
is controlled by Patrick Eilers, a director of XPDB. Please disclose the aggregate dollar value of the shares that TEP will receive at
the current exchange ratio.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on pages xix, 5 and 167 of the Revised Registration
Statement.

United States Securities and Exchange Commission

October 2, 2023

Page 3

Risk Factors

Risks Related to Our Business and Our Industry

Our commercialization strategy relies heavily, page 20

 5. We note your statement that you depend on relationships with third parties. In this regard, it appears
you have a development agreement with BASF and a joint venture agreement with CATL. Please describe the material terms of these agreements
and file them as exhibits or tell us why they are not required to be filed. Refer to Item 601(b)(10) of Regulation S-K.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on pages 131, 132, 133 and 134 of the Revised Registration
Statement and has filed the joint development agreement with BASF, the joint venture agreement with CATL, and the investment agreement
with CATL as exhibits 10.13, 10.14, and 10.15, respectively, to the Revised Registration Statement.

Unaudited Pro Forma Condensed Combined Financial Statements

Description of the Business Combination, page 55

 6. You disclose that the grants of the Earnout Shares will be dependent upon board approval to construct
lines of production of coated contactors based upon demand from customer commitments beyond three lines of production in the base plan.
However, your disclosure on page F-40 appears to indicate that the Earnout Shares will be issued upon achievement of certain milestones
related to production capacity and anticipated annualized EBITDA of the Combined Company following Closing. Please revise your disclosures
to describe all the conditions upon which Earnout Shares will be paid, the specific targets that must be met, and the associated shares
that will be paid upon achievement of each target.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on page the inside cover and pages xi, 1, 2, 56, 118,
119, 155 and 173 of the Revised Registration Statement.

 7. Tell us how you considered whether Earnout Shares payable to Montana Equityholders represent post combination
compensation expense. In your response, please clarify: 1) whether continuing employment is required to earn the awards for any employees
and, if so, the length of such required continued employment; 2) how compensation for Equityholders who are continuing employees was determined,
including whether it is reasonable compared to other key employees who are not equity holders; and 3) whether all Equityholders will receive
the same additional shares on a per share basis, including those who will continue as employees and those who will not.

RESPONSE:

The Company respectfully advises
the Staff that Latham & Watkins LLP, counsel to Montana, has confirmed that approximately 9.0% of the total Earnout Shares are attributable
to holders of Montana Options; therefore, they will be evaluated separately under Accounting Standards Codification Topic 718—Stock
Compensation (“ASC 718”). According to Section 2.4(i) of the Merger Agreement,

“Notwithstanding anything in this
Agreement to the contrary, any Earnout Stock issuable under this Section 2.4 in respect of a Company Option that was outstanding as of
immediately prior to the Effective Time shall be issued to the holder of such Company Option only if such holder continues to provide
services (whether as an employee, director or individual independent contractor) to Parent or one of its Subsidiaries through the date
on which such Earnout Stock is issued, as determined by the Parent Board, pursuant to this Section 2.4.”

United States Securities and Exchange Commission

October 2, 2023

Page 4

As the above provision requires holders of Montana
Options’ continued employment or service in order to vest in or be eligible for their Earnout Shares, management determined that
9.0% of the total Earnout Shares are subject to accounting under ASC 718 and would be accounted for as post-combination compensation cost.
The pro forma financial statements do not give effect to the recognition of post-combination compensation cost since the vesting of such
shares is unpredictable at this point of time.

For the remaining 91.0 % of
the Earnout Payments to securityholders of Montana other than holders of Montana Options, the Earnout Payments include a future contingency
component related to the Post-Combination Company’s Expected Annualized EBITDA over certain thresholds. No explicit or implied service
conditions are included as part of the Merger Agreement terms. There are no employee services or board of director services being provided
in exchange for the Earnout Shares; therefore, such Earnout Payments are considered contingent consideration. Since the level of EBITDA
is not an input to the fair value of a fixed-for-fixed option under analysis of ASC 815-40-15, equity classification is precluded. For
the purpose of the pro forma financial information giving effect to the Business Combination, a liability of Earnout Shares of $76 million
is recorded as of the pro forma balance sheet date.

Pursuant to the Merger Agreement,
only holders of Montana Common Units, Montana Preferred Units and Montana Options (each an “Eligible Equityholder”) will be
eligible to receive Earnout Shares. Holders of Montana Options that were outstanding immediately prior to the Effective Time will be required
to continue providing services (whether as an employee, director or individual independent contractor) to Parent or one of its Subsidiaries
through the date on which such Earnout Shares are issued in order to be eligible to receive the Earnout Shares. There is no requirement
for continued employment with respect to holders of Montana Common Units or Montana Preferred Units. Each Eligible Equityholders will
receive Earnout Shares in accordance with such Eligible Equityholder’s pro rata share, which will be calculated by dividing (a)
the total number of (i) Montana Common Units issued and outstanding immediately prior to the effective time of the Merger (after giving
effect to the conversion of each Montana Preferred Unit to one Montana Class B Common Unit and the conversion of any equity interests
issued in the Capital Raise, if any) held by such Eligible Equityholder immediately prior to the effective time of the Merger, plus (ii)
Montana Common Units issuable upon the exercise of Montana Options that are outstanding and unexercised and held by such Eligible Equityholder
immediately prior to the effective time of the Merger, in each case with the number of Montana Common Units issuable to be calculated
on an as-converted basis assuming consummation of the Merger, by (b) the total number of (i) Montana Common Units issued and outstanding
immediately prior to the effective time of the Merger (after giving effect to the conversion of each Montana Preferred Unit to one Montana
Class B Common Unit and the conversion of equity interests issued in the Capital Raise, if any) held by all Eligible Equityholders immediately
prior to the effective time of the Merger, plus (ii) Montana Common Units issuable upon the exercise of Montana Options that are outstanding
and unexercised and held by all Eligible Equityholders immediately prior to the effective time of the Merger, in each case with the number
of Montana Common Units issuable to be calculated on an as-converted basis assuming consummation of the Merger. As a result, if a holder
of Montana Options ceases to provide services (whether as an employee, director or individual independent contractor) to Parent or one
of its Subsidiaries prior to the date on which Earnout Shares are issued, and accordingly ceases to be eligible to receive such Earnout
Shares, such Earnout Shares will be forfeited and shall not be issued to or otherwise redistributed among the other Eligible Equityholders.

United States Securities and Exchange Commission

October 2, 2023

Page 5

Anticipated Accounting Treatment, page 57

 8. You disclose that the Montana Equityholders will have the ability to control decisions regarding election
and removal of directors and officers of the Post-Combination Company. Please revise your disclosures to clarify how Montana Equityholders
will have this ability. In this regard, your disclosure on page 84 appears to indicate that stockholders of XPDB are being asked to elect
a number of directors to the Post-Combination Company Board with terms ranging between 2024 and 2026. Please clarify the expected size
of the Board of Directors, how may directors XPDB will have the ability to elect and how many directors Montana will have the ability
to elect. Please also clarify the agreements that give Montana Equityholders the ability to control decisions regarding election and removal
of directors and officers, both at the closing of the Business Combination and in post-closing periods.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on pages 58 and 170 of the Revised Registration Statement.
Pursuant to the terms of the Merger Agreement, Montana and XPDB will mutually agree on the persons to be nominated for election to the
Post-Combination Company Board. The size of the Post-Combination Company Board and the persons to be nominated for service thereon have
not yet been determined, though XPDB and Montana anticipate that Montana will nominate a majority of such members of the Post-Combination
Company Board for election by XPDB’s shareholders at the Special Meeting to be held prior to the closing of the Business Combination.
Except for the Proposed Charter and Amended and Restated Bylaws of the Post-Combination Company to be adopted at Closing, which generally
provide for the election of members of the Post-Combination Company Board by vote of the stockholders of the Post-Combination Company,
there are no agreements that give Montana Equityholders the ability to control decisions regarding election and removal of directors and
officers at or following the closing of the Business Combination.

Unaudited Pro Forma Condensed Combined Balance Sheet

Adjustments to Unaudited Pro Forma Condensed Combined Balance
Sheet

Note (L), page 61

 9. Revise your disclosure to clarify how you determined the fair value of the Earnout Shares, including
all significant assumptions used. Please also clarify how you will determine the fair value in periods subsequent to the closing of the
Business Combination and provide an estimate of the possible range of outcomes and the related impacts on your income statement.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that it has revised the disclosure on page 62 of the Revised Registration Statement.

Unaudited Pro Forma Condensed Combined Statements of Operations,
page 64

 10. Tell us how you considered including adjustments for compensation expense relating to the Earnout Shares
payable to the holders of Montana Options in your pro forma income statements for the year ended December 31, 2022 and the three months
ended March 31, 2023, assuming the Business Combination had been consummated as of January 1, 2022.

RESPONSE:

The Company respectfully acknowledges
the Staff’s comment and advises the Staff that as discussed in its response to the Staff’s comment number 7, the Earnout arrangement
includes a future contingency component related to the post-closing entity’s Expected Annualized EBITDA over certain thresholds
during a five-year period. The Earnout Shares shall be issued to the holders Montana Options only if such holders continue to provide
services through the date on which such Earnout Shares are issued. The pro forma financial statements do not give effect to the recognition
of post-combination compensation cost since the vesting of such shares is unpredictable at this point in time.

United States Securities and Exchange Commission

October 2, 2023

Page 6

 11. Your disclosure on page 115 indicates that any share redemption or other share repurchase that occurs
after December 31, 2022, in connection with a business combination, extension vote or otherwise, may be subject to the new U.S. fe