"24/7 Wall St. hosts Doug McIntyre and Lee Jackson analyze a major move by BlackRock to acquire the utility company AES, describing it as the beginning of a larger wave of consolidation across the utility and banking sectors. It could signal how companies like BlackRock might be positioning themselves to control the energy sources needed to power data centers and AI infrastructure."
"but the strategic implications are enormous. Similar partnerships could begin to form with investment firms, AI companies, and utilities working together to secure both funding and energy. Lee points out that utility stocks have surged recently, reducing dividend yields as prices climb, and says this trend reflects the growing recognition of energy's critical role in AI's expansion. He also warns that the U.S. power grid is underdeveloped and unprepared for the massive new energy demand, referencing past grid failures like the 2021 Texas freeze."
BlackRock's move to acquire AES marks a strategic push into utilities that could enable control over energy supply for data centers and AI infrastructure. The acquisition cost is small relative to BlackRock's scale, but it could trigger partnerships among investment firms, AI companies, and utilities to secure funding and power. Utility stocks have risen, compressing dividend yields as investors price in energy's role in AI growth. The U.S. power grid is underdeveloped and vulnerable to surging demand, prompting expectations of large capital flows into grid modernization. Natural gas and utilities tied to AI are positioned as reliable long-term investments.
Read at 24/7 Wall St.
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