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A column chart that shows annual private equity-backed M&A deals in U.S. power from 2022 to 2026. Deal values peaked at $41.8 billion in 2026 with 4 deals, while 2025 had the highest deal count at 62 with $38.2 billion.

Annual private equity-backed M&A deals in U.S. power

AI and electrification have transformed ho-hum utilities and power firms into must-have assets.

The big picture: Where electric utilities and power providers were once seen as a defensive, slow-growing asset in an investment firm's portfolio, they're now being targeted to generate big returns.

Zoom in: Decades of mostly flat electricity growth have been replaced by eye-watering demand from power-hungry data centers and broader electrification of homes and businesses.

Driving the news: A consortium led by BlackRock's Global Infrastructure Partners and EQT Partners agreed to acquire a majority stake in AES for $33.4 billion.

It's the second-largest private equity-backed power deal on record, both in the U.S. and globally, per LSEG data provided to Axios Pro.

By the numbers: The rank value, or total enterprise value, of private equity-backed deals in the sector more than tripled last year to $38.2 billion in the U.S.

"Investors are targeting platforms that can provide generation capacity, support grid reliability, and operate within established regulatory frameworks," Kyle Long, PwC's U.S. power and utilities lead, tells Axios Pro.

What they're saying: "AES has been a leader in contracting with hyperscalers," Nick Campanella, director and lead analyst covering U.S. power and utilities at Barclays, tells Axios Pro.

"So they have a very large backlog of projects, they have a lot of secured land and interconnect, which can be valuable for renewables, or to pivot to more conventional solutions."

What we're watching: If AES' new owners see more upside in renewables and battery storage — or in natural gas.

BlackRock's AES buy reflects the power arms race

A column chart that shows annual private equity-backed M&A deals in U.S. power from 2022 to 2026. Deal values peaked at $41.8 billion in 2026 with 4 deals, while 2025 had the highest deal count at 62 with $38.2 billion. 

AI and electrification have transformed ho-hum utilities and power firms into must-have assets.The big picture: Where electric utilities and power providers were once seen as a defensive, slow-growing asset in an investment firm&#x27;s portfolio, they&#x27;re now being targeted to generate big returns.

BlackRock's AES buy reflects the power arms race

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