AI Data Center Boom to Drive Growth for Key Utilities, Barclays Says

A new analysis from Barclays identifies a select group of U.S. utility companies as primary beneficiaries of the massive power demand created by the artificial intelligence boom. The investment bank projects that annual spending by Western hyperscalers and AI labs on digital and power infrastructure could surpass $1 trillion before it peaks in 2028.

The AI Power Demand

The rapid expansion of data centers to support AI applications is creating an unprecedented surge in electricity consumption, presenting a significant growth catalyst for the traditionally stable utilities sector. According to the Barclays report, which surveyed over 400 companies, utilities are a critical component of this infrastructure buildout, tasked with providing the vast and reliable power these facilities require.

This demand is forcing utilities to accelerate capital spending on new generation capacity and transmission infrastructure. For investors, this trend could reshape the growth profile of companies that can secure large-scale, long-term contracts with data center operators.

Top-Positioned Utilities

Barclays highlighted several companies with substantial data center load pipelines and strategic advantages. Key names include:

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• Southern Company (SO): Reported a large load pipeline exceeding 75 gigawatts (GW), with 10 GW already under contract.
• American Electric Power (AEP): Has signed letters of agreement for 36 GW with large industrial customers, including hyperscalers and data center developers.
• DTE Energy (DTE): Secured a 1.4 GW contract with Oracle for an AI data center, prompting a 20% increase in its five-year capital plan to $36.5 billion.
• Duke Energy (DUK): Holds approximately 4.5 GW in data center service agreements with major tech firms like Microsoft and Amazon.
• Dominion Energy (D): Strategically positioned by serving Northern Virginia's "Data Center Alley," a region that handles a significant portion of global internet traffic.

Other Companies to Watch

The report also noted other utilities that are well-positioned to benefit. Vistra (VST) was cited for its large nuclear and natural gas generation fleet in key data center markets, while WEC Energy (WEC) forecasts 3.9 GW of new demand by 2030, driven by major tech investments in its service area.

Barclays also flagged Ameren (AEE), CMS Energy (CMS), Entergy (ETR), NRG Energy (NRG), and Public Service Enterprise (PEG), among others, as companies with potential upside from the AI infrastructure expansion.