The recent boom in artificial intelligence has significantly driven up merger and acquisition transactions in the U.S. energy sector, totaling a record $203.6 billion in the first five months of the year. This figure represents a more than 40% increase compared to the entire previous year’s total of $141.7 billion, according to Deloitte.
Investment in data centers has also surged, reaching $151.5 billion, more than double the $68.7 billion recorded during the same period last year. Overall, the total investment in data centers for the entirety of 2025 is projected to hit $321 billion.
In the first five months of 2026 alone, 77 transactions were announced in the energy and utilities sector, compared to 157 transactions for all of 2025. This explosion of activity in a heavily regulated industry is largely driven by companies seeking scale to capitalize on the data center boom, as well as a trend of businesses divesting non-core assets to fund expansion.
Thomas Keefe, a senior manager in Deloitte’s energy, utilities, and renewables division, noted a significant influx of interest from private equity and infrastructure funds. He highlighted that utility companies are particularly attractive to investors due to their potential for stable cash flows.
According to Keefe, the AI boom has transformed growth prospects for utility companies and energy producers, with some projecting revenue increases of 50-100% over the next five to ten years. The increasing demand for energy driven by the infrastructure needed to support ever-growing data volumes has created what George Bilicic, global head of Lazard’s energy and infrastructure division, described as a “trend that seems unstoppable.”
Bilicic further emphasized that the demand for energy extends well beyond artificial intelligence. Factors such as electrification, reindustrialization, the growing popularity of electric vehicles, and increased overall energy needs due to economic growth contribute significantly to this phenomenon.
Costs Impacting Consumers
Analysts warn that the surge in transactions is likely to draw greater regulatory scrutiny due to rising political concerns over electricity affordability. Nationally, electricity costs have increased by 9% since last year, with North Carolina and South Carolina seeing an 8% rise and Virginia experiencing a 15% increase.
Consumer advocacy organizations caution that mergers may lead to higher costs for consumers by strengthening the monopolistic power of utility companies, allowing them to exert greater influence over regulations and pass costs onto ratepayers. Across the U.S., politicians from both parties have criticized utility companies for the high costs faced by consumers. Senators Elizabeth Warren, Chris Van Hollen, and Richard Blumenthal have initiated an investigation into the role of data centers in rising energy prices, arguing that utility companies and large tech firms are forcing American families to “subsidize” their expenses.
