Wall Street investment giants are reportedly purchasing utilities amid the ongoing AI boom.<\/p>\n
The goal, as The New York Times (NYT)\u00a0reported<\/a>\u00a0Thursday (July 17), is to benefit from the rising demand for electricity from data centers.<\/p>\n Among the investment groups engaged in this effort is\u00a0BlackRock<\/a>, the world\u2019s largest asset manager, which wants to acquire\u00a0Minnesota Power<\/a>. That utility owns several power plants and thousands of miles of power lines that could help artificial intelligence (AI) companies secure energy for their\u00a0data centers<\/a>.<\/p>\n However, this deal is facing pushback, with a state administrative law judge recommending this week late Tuesday that Minnesota utility regulators deny the proposed acquisition.<\/p>\n Another investment group, private equity firm\u00a0Blackstone<\/a>, announced an agreement in May to purchase Albuquerque-based\u00a0TXNM Energy<\/a>, which provides electricity to 800,000 residential and business customers in New Mexico and Texas.<\/p>\n These efforts have drawn criticism from consumer and progressive groups, who argue investment firms\u00a0shouldn\u2019t own electric utilities as they typically want to maximize profits, often by burdening the company\u2019s finances with debt. This approach, the critics argue, could lead to much higher rates and worse service.<\/p>\n \u201cNo one in northern Minnesota wants higher utility bills solely to line the pockets\u00a0of Wall Street-based private equity firms,\u201d said Nichole Heil, senior researcher and\u00a0campaign director for climate at the Private Equity Stakeholder Project.<\/p>\n The report notes that\u00a0electricity rates<\/a>\u00a0are rising around the country, in part because of upgrades to address climate change, and in part because of increased demand from AI data centers.<\/p>\n The news comes days after the announcement that\u00a0Google<\/a>,\u00a0Meta<\/a>, Blackstone and\u00a0CoreWeave<\/a>\u00a0were planning to spend hundreds of billions of dollars to construct new AI data centers<\/p>\n Google told PYMNTS Tuesday (July 15) that it plans to\u00a0spend $25 billion<\/a>\u00a0over the next two years on data centers and AI infrastructure in the PJM electric grid region, a coverage area that runs from New Jersey to North Carolina and Illinois to the nation\u2019s capital.<\/p>\n