These Infrastructure Stocks Could Quietly Power the AI Revolution

Technology companies are investing a substantial amount of money in hardware, processors, and memory storage to support AI. According to an estimate by McKinsey, companies need to invest a staggering $5.2 trillion by 2030 on data centers equipped to handle AI processing loads.

However, technology is only part of the story. Power is quietly becoming a major factor in driving the AI revolution because AI data centers consume an enormous amount of electricity. As a result, leading energy infrastructure companies such as NextEra Energy (NEE 1.62%) and Brookfield Renewable (BEPC +1.36%)(BEP +0.79%) are emerging as leaders in powering the AI revolution.

Partnering with AI leaders

NextEra Energy owns the country’s largest electric utility (Florida Power & Light) and one of the largest energy infrastructure development companies (NextEra Energy Resources). The energy resources segment owns and develops energy infrastructure, including electricity transmission lines and power generation facilities, to support third-party demand.

The company has become a key partner of choice for technology companies to help power their AI strategies over the past year. In October, NextEra Energy signed a new collaboration with Alphabet‘s (GOOG +1.60%)(GOOGL +1.47%) Google to accelerate nuclear energy deployment in the U.S. As part of the partnership, NextEra Energy will restart its dormant Duane Arnold Energy Center in Iowa to support Google’s growing power needs. The tech titan has signed a 25-year power purchase agreement (PPA) to purchase the bulk of the power produced by the facility upon its return to commercial service in the first quarter of 2029.

NextEra and Google also announced a significant expansion of their energy and technology collaboration in December. They will partner on developing multiple gigawatt (GW)-scale data center campuses in the future with accompanying generation and capacity. NextEra will supply the energy expertise, while Google will bring its data center development capabilities to the partnership.

NextEra Energy is also working with Meta Platforms to help power its AI operations. Meta Platforms recently signed 11 PPAs and two energy storage agreements. NextEra will develop several solar energy projects for Meta, totaling 2.5 GW of power-producing capacity.

Massive power deals

Brookfield Renewable is a leading global renewable energy producer. It sells the power it produces to utilities and large corporations under long-term PPAs.

Earlier this year, Brookfield announced a first-of-its-kind Hydro Framework Agreement with Google. The cloud giant will purchase up to 3 GW of carbon-free hydroelectric power from the company in the future, marking the largest-ever hydropower deal. The first two 20-year PPAs represent over $3 billion of power and cover Brookfield’s Holtwood and Safe Harbor hydroelectric facilities in Pennsylvania, which have a combined generating capacity of 670 megawatts.

Brookfield also signed a first-of-its-kind global renewable energy framework with Microsoft (MSFT +0.40%) last year. The five-year agreement will see Brookfield develop over 10.5 GW of new renewable energy capacity for the technology giant in the 2026 through 2030 time frame across the U.S. and Europe. It’s eight times bigger than the largest single corporate PPA ever signed. The deal will provide Microsoft with a pipeline of renewable energy capacity to support growing demand for its cloud and AI services. The companies have the potential to expand their collaboration to Asia-Pacific, India, and Latin America in the future, as well as to new or impactful carbon-free energy sources beyond wind and solar.

Additionally, Brookfield Renewable has an investment in Westinghouse Electric, a nuclear technology company. The U.S. Government recently signed a strategic partnership with Westinghouse to build at least $80 billion of new nuclear reactors in the country using the company’s technology. These plants will help support the country’s growing AI power needs.

The power behind the AI revolution

NextEra Energy and Brookfield Renewable are two of the world’s largest clean power producers. They have the electricity production capacity and development capabilities to meet the growing power needs of AI. That’s leading tech titans Google, Meta, Microsoft, and others to join forces with these energy companies to help fuel the AI revolution. These deals will provide technology companies with the energy they need, while potentially powering robust total returns for investors in NextEra Energy and Brookfield Renewable in the coming years.