Investment Strategy

The Convergence of Data Centers and Power: A Generational Investment Opportunity | The Connection

With this explosion in data, there’s an urgent need for physical infrastructure to store, process, and deliver it.

In our view, the intersection of digital infrastructure and the need for power is one of the most exciting and critical investment themes of our time. As AI continues to evolve, the demand for data centers and power will only grow, creating a wealth of opportunities. At Blackstone, we’re committed to being at the forefront of this megatrend, and I believe the next decade will bring tremendous value to investors who recognize the potential in this space.

The rapid expansion of digital infrastructure and the growing demand for power is a topic on everyone’s mind these days. Many are wondering, does the hype really match reality? From my perspective, not only is the hype justified, but the opportunity is far larger than most realize. To fully understand this intersection of digital infrastructure and power, let’s start by looking at the driver behind the AI revolution: data.

The Data Explosion: Fueling the Future

The amount of data being generated and consumed is nothing short of extraordinary. Think back to 2006, when cloud computing first emerged. Facebook hit 100 million users by 2008, Instagram in 2013, and Netflix by 2017. In 2022, ChatGPT hit 100 million users just two months after launching, and earlier this year, OpenAI introduced SORA, a text-to-video app that has drawn significant user interest.1

The result? Data usage has increased 100 times over the past 15 years, and even more striking, more data has been created in the past three years than in all of history.2 As AI continues to gain momentum, this trend will only accelerate. Global cloud migration is still in its early stages, and with revenues from cloud services expected to more than triple in the next five years, data growth will be astronomical.

Figure 1: Data Created, Consumed and Stored
(Zettabytes)

Source: International Data Corporations (IDC), as of 5/31/2024. 2024 and 2025 represent year-end estimates.

Data Intensity: The Rising Demand for Power

But it’s not just the sheer amount of data that’s growing—it’s the intensity of the data being processed. Traditional tools, like Google searches, are lightweight in terms of power consumption. Conversely, a ChatGPT query requires 10 times the power of a Google search and AI-generated images using tools like DALL-E require 50 times the power of a simple Google search. And if you ask SORA to create a video? We’re talking 10,000 times the power consumption.3

To put that into perspective, creating a basic AI-generated video is the energy equivalent of charging your phone 119 times. As AI applications become more advanced and widespread, we are just beginning to scratch the surface of what I call the next wave of data intensity.

Figure 2: AI Compute Power Required vs. Google Search1

Source: Internet Search & Language AI: Reuters, as of 2/22/2023 (latest available). Image AI: The Register, as of 12/4/2023 (latest available). Video AI: Factorial Funds, as of 3/15/2024. (1) Represents power consumption requirements.

Data Centers: The Backbone of the Digital Revolution

With this explosion in data, there’s an urgent need for physical infrastructure to store, process, and deliver it. This is where data centers come into play. Over the past five years, the number of US-leased data centers has increased 17 times, driven by the rise in cloud computing and AI. This year alone, 5,000 megawatts of data center capacity will be added in the US.4 That’s roughly 1% of the nation’s total power consumption—about the same amount of power used by Miami-Dade County’s 2.7 million people.

Figure 3: Accelerating Demand for Data Centers2
(US New Leasing in Megawatts)

Figure 4: Largest Single Leases in Market3
(Megawatts)

Source: Dell’Oro estimates, July 2024. | (2) datacenterHawk, as of June 30, 2024. | (3) NADC, CBRE and datacenterHawk, as of June 30, 2023. 2024 reflects BX estimate of Google self -built data center.

The growth of data centers is a global phenomenon. We estimate that the US will see over $1 trillion invested in data centers over the next five years, with an additional $1 trillion invested internationally.5 The scale of these facilities is staggering. The largest data center currently under construction is an estimated 500 megawatts,6 which is equivalent to the power demand of 375,000 homes.7 As a matter of course, OpenAI CEO Sam Altman recently proposed building clusters of 5,000-megawatt data centers across the US,8 each of which would be equivalent to the entire US data center capacity built in the last 12 months.

Regions like Europe and Asia are still a couple of years behind the US in terms of demand growth. But with Asia representing two-thirds of the global population and accounting for just 15% of global data center leasing, the potential for growth in these regions is immense.9

Power Demand: A Looming Bottleneck

As exciting as the growth in digital infrastructure is, it comes with a significant challenge: the power to support it. Take a look at what’s happening in Atlanta, now the second-largest global data center market. Data center demand has increased by 46 times since 2019,10 and as a result, power demand in Georgia is projected to grow by 39% between now and 2030.11 This type of growth is not unique to Georgia—states like Arizona, Indiana, Virginia, and Texas are also contending with 5% or higher annual growth in power demand.12

For a US market that had relatively flat power demand for the past 20 years, this sudden surge is a major shift. As a country, we face the prospect of having to double our power grid’s capacity over the next 12 to 13 years to keep up.13 At the same time, the rise of electric vehicles is adding more strain to the grid. Every new EV increases a home’s power consumption by 40%. In addition to this strain is the $500 billion being invested in reindustrializing the US with power-hungry factories,14 and it’s clear we’re dealing with a massive spike in power demand.

Figure 5: US Power Grid Transmission Queue
(Gigawatts)

Source: Lawrence Berkeley National Laboratory, as of 4/30/2024.

On the supply side, things don’t look any easier. Roughly 15% of the US power supply is still coal-generated, but those plants are being retired.15 Meanwhile, our grid is aging—on average, it’s over 40 years old—and renewable energy sources like wind and solar, while promising, have a capacity factor of only around 30%.16 This means that backup power from natural gas and battery storage will be crucial to ensuring the grid remains stable.

The Investment Opportunity

This convergence of data center growth and rising power demand presents a rare and compelling investment opportunity. At Blackstone, we’ve positioned ourselves at the forefront of this trend, becoming the largest global investor in data centers and AI-driven infrastructure. We identify significant upside potential in several areas.

First, data center leasing is set to continue growing as AI and cloud computing expand. Across Blackstone, we have over $70 billion worth of data center assets, with another $100 billion in our pipeline, including facilities under construction and our announced acquisition of Airtrunk. Many of these assets are backed by long-term contracts with AA-rated counterparties, offering stable, attractive returns.

Second, power generation and utilities, particularly in the renewable space, are poised for significant growth. With trillions of dollars needed to upgrade the power grid, we believe investments in wind, solar, and natural gas generation will yield strong returns. In particular, we expect significant demand for natural gas pipelines, as renewables require backup power.

Lastly, the broader energy transition, including investments in battery storage, HVAC systems, and transmission infrastructure, presents a meaningful opportunity to capitalize on this megatrend. At Blackstone, we’re excited to be leaning into this megatrend and believe we are well positioned to deliver value-add to our investors.



  1. International Data Corporation (IDC), as of May 2024.
  2. International Data Corporation (IDC), as of May 2024. Reflects change in data created, stored and consumed in Zettabytes, from 2010 to 2025 (2024 and 2025 represent year-end estimates).
  3. Represents power consumption requirements. Internet Search & Language AI: Reuters, as of February 22, 2023 (latest available). Image AI: The Register, as of December 4, 2023 (latest available). Video AI: Factorial Funds, as of March 15, 2024.
  4. DatacenterHawk, as of June 30, 2024.
  5. Dell’Oro estimates, as of July 31, 2024.
  6. NADC, CBRE and DatacenterHawk, as of June 30, 2023. 2024 reflects BX estimate of Google self -built data center.
  7. Gridstor, as of October 28, 2022.
  8. Bloomberg, as of September 24, 2024.
  9. DatacenterHawk as of June 30, 2024; Altman Solon as of April 30, 2024.
  10. DatacenterHawk, as of June 30, 2024.
  11. Reflects Georgia Power expected load growth through 2030 as forecasted in 2021 and forecasted in 2024. QTS Reporting, as of January 2024.
  12. (1) Arizona represents long-term electricity sales forecast of Pinnacle West (NYSE:PNW; fully regulated electric utility serving ˜1.4million customers in high-growing cities across Arizona) in 2019 vs. 2024. | (2) Georgia represents utility Georgia Power’s summer peak demand CAGR published in 2022 (’22–’41) vs. latest forecast (’23–’30). | (3) ERCOT and PJM are Independent System Operators (ISO) organizations that coordinate, control, and monitor operations of the electrical power system / power capacity market in Texas / the Mid-Atlantic, respectively. PJM is the ISO region that covers DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and DC. | (4) Virginia represents Dominion PJM 10-year summer peak demand CAGR published in 2021 vs. 2024. | (5) N. Indiana represents NIPSCO peak load forecast published in 2021 (roughly flat through ’40) vs. the latest 2nd Draft of the 2024 Stakeholder Integrated Resource Plan (IRP). Uses a forecast period of (’23–’35) and does not include upside emerging load from data centers in revised case. | (6) Texas represents ERCOT summer peak demand CAGR published in 2023 (’23–’32) vs. latest forecast (’23–’30).
  13. US Department of Energy, as of August 12, 2024.
  14. The White House, as of April 2024. Represents ˜$500 billion committed by corporations into electricity-intensive battery, solar panel, EV, and semiconductor manufacturing facilities.
  15. US Energy Information Administration, as of February 2024.
  16. US Department of Energy, as of October 2023.