Surging power demand from artificial intelligence is overwhelming electrical grids and slowing data center expansion. Grid connection waits can last several years, while developers build AI data centers in a fraction of that time. Reliance on the public grid has become a major business risk.
Investors, including private equity giants Blackstone, KKR, and Brookfield, are pouring billions into on-site power generation. These projects bypass grid constraints and include natural gas plants, fuel cells, and potential future options such as small modular reactors.
Investors are using several financing approaches: funding specific projects, taking equity stakes in on-site power companies, or financing equipment for data center operators.