Big tech M&A teams are no longer only scouring the markets for targets with promising technology and talented teams. Power companies are now on their shopping lists too.

Just before Christmas last year Google’s parent company Alphabet announced a US$4.75 billion deal to acquire Intersect Power, a clean energy developer. The transaction was the latest in string of similar M&A plays and long-term deals by technology companies in the power generation space.

Amazon, for example, anchored a US$500 million funding round for X-Energy Reactor, a nuclear reactor and fuel technology business, while Constellation Energy agreed to restart a nuclear power reactor in Pennsylvania, with funding coming from a 20-year power purchase agreement (PPA) with Microsoft.   

Indeed, big tech companies like Amazon, Google, Microsoft, and Meta have invested such vast amounts in power generation capacity that they have filed with the US Federal Energy Regulatory Commission for authorization to trade electricity and sell energy back to the grid.

Power hungry: accessing energy to run AI infrastructure

Big tech’s power appetite is almost entirely driven by the rise of AI and the huge demand for investment in the digital infrastructure and data centers required to run it.

AI-powered large language models (LLMs) demand a massive amount of computing power, which is spurring investment in new data center capacity at an unprecedented level. McKinsey forecasts that by 2030 expenditure on data centers could hit up to US$1.7 trillion.

Building out data center infrastructure at this pace and scale is impossible without power supply. AI is a power intensive exercise that has completely reshaped data center power requirements. Data centers used to be able to operate comfortably on tens of megawatts, but now have to draw power in the multiple gigawatts to support AI computing demands.

Access to power has therefore become a strategic imperative for data center and AI viability. Relying exclusively on connections to existing grids, however, is looking less and less sustainable. Grid connection waitlists and delays and social backlash from the impact on residential and commercial power supply and costs can quickly derail additional data center capacity from coming onstream.

In response, big tech players are turning to M&A, JVs, and PPAs to bring their power supply requirements into their own hands.

Rather than banking on the grid to cover energy requirements, tech groups are investing in their own onsite generation, also known as “behind the meter” capacity, to power their data centers. Alternately, tech companies can combine on-site generation with grid supply, with the flexibility to sell any excess on-site production back to the grid.

Investing in on-site capacity, however, isn’t just about securing supply. It is also about managing carbon footprint.

Technology companies are anxious about the impact of heavy data center electricity consumption on their carbon emissions targets. In 2024, Google reported that its 2023 emissions were 48% higher than 2019 levels due to data center power requirements.

An on-site generation power plan is one way to address this, as tech companies can invest in renewable and lower-emission power sources to power their data centers directly.

Indeed, the Intersect deal is believed to be the first time a technology giant has acquired large renewable energy developer, highlighting the importance of not just taking control of direct supply, but keeping emissions to a minimum while doing so.

With McKinsey estimating that data center power consumption will more than triple between 2023 and 2030, from 147 TWh to 606 TWh, there are likely to be many more deals like Intersect to come.

What this means for dealmakers

AI’s surge in data center demand and energy usage is reshaping how transactions come together. For dealmakers, the intersection of technology and power is no longer a fringe consideration; it’s a defining factor in assessing risk, value, and scalability.

To stay ahead, fold energy availability, regulatory constraints, and sustainability impact into your earliest deal evaluations. This sharper upfront lens helps you qualify opportunities faster, avoid late‑stage surprises, and focus capital on assets built to scale in an AI‑driven environment.

In a market where power has become a strategic differentiator, the strongest positions will belong to those who can read both the tech story and the energy story in tandem.