From Power Plants to Processors

Private equity firms have invested nearly $200 billion in data center-related industries since January 2022, driving a strategy of acquiring vertically integrated retail energy utilities and fossil fuel power plants to secure power for AI infrastructure. BlackRock's Global Infrastructure Partners (GIP) has acquired ALLETE Inc. and is pursuing a $38 billion takeover of AES, while Blackstone has invested in the Potomac Energy Center and is seeking to acquire TXNM Energy. The report argues that this expansion risks creating stranded high-emitting assets if AI demand is overestimated, while already causing increased electricity costs for ratepayers—rising up to 267% in some data center hubs—and significant environmental degradation. Organized community resistance has already delayed or blocked $64 billion in data center projects across 24 U.S. states.

• Private equity firms have become dominant players in the data center sector, investing nearly $200 billion and participating in 80 to 90 percent of completed mergers and acquisitions in data center-related industries over the last three years. Since January 2022, these firms have invested in more than 450 data center companies.
• BlackRock, via Global Infrastructure Partners (GIP), is aggressively expanding its energy portfolio to support data centers. This includes the $6.2 billion acquisition of ALLETE Inc. (parent of Minnesota Power) and a proposed $38 billion take-private acquisition of AES, which would potentially double GIP's fossil fuel power plant portfolio to 50 plants with a capacity of 32,000 MW across 11 countries.
• Blackstone is pursuing a vertically integrated AI supply chain strategy, investing in data center operators (QTS Realty Trust, Digital Realty, AirTrunk), hardware/software (CoreWeave, DDN), and power generation. Key moves include the $1 billion acquisition of the 744-MW Potomac Energy Center in Virginia and a planned $25 billion investment in Pennsylvania data centers and gas plants.
• The expansion of data centers is placing significant financial and environmental burdens on local communities. In areas with high data center activity, wholesale electricity prices have increased by 267% over five years. Additionally, data centers consume large amounts of land, water, and electricity, while causing acoustic and air pollution.
• There is a significant risk of 'overbuildout' and stranded assets because AI energy demand forecasts are speculative. The report notes that more efficient AI designs, such as those from the startup DeepSeek, demonstrate that models can operate with far fewer resources than previously estimated, potentially making new gas plant construction unnecessary.
• Community and regulatory opposition to data center and utility takeovers is increasing. In the U.S., at least 142 activist groups across 24 states have organized, resulting in the delay or blocking of approximately $64 billion in data center projects over the past two years.
• Blackstone's acquisition of energy utilities faces specific resistance in the Southwest and Midwest. This includes a $11.5 billion bid for TXNM Energy (serving 800,000 customers in Texas and New Mexico) and a 19.9% stake in NIPSCO in Indiana, where the creation of a new subsidiary (GenCo) to serve data centers is linked to a proposed 2,300 MW gas plant.

APA

Private Equity Stakeholder Project (2025). From Power Plants to Processors. https://pestakeholder.org/reports/from-power-plants-to-processors/

Chicago

Private Equity Stakeholder Project. From Power Plants to Processors. 2025. https://pestakeholder.org/reports/from-power-plants-to-processors/.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=From Power Plants to Processors |date=31 October 2025 |url=https://pestakeholder.org/reports/from-power-plants-to-processors/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderproject2025from, author = {{Private Equity Stakeholder Project}}, title = {{From Power Plants to Processors}}, institution = {Private Equity Stakeholder Project}, year = {2025}, month = oct, url = {https://pestakeholder.org/reports/from-power-plants-to-processors/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }