We’ve long argued that we’re still in the early innings of the AI infrastructure buildout and the announcements at last week’s Pennsylvania Energy and Innovation Summit confirmed just how early we are. President Trump unveiled a massive $92 billion investment package from the private sector focused on AI and energy infrastructure in Pennsylvania, signaling the next phase of industrial-scale AI readiness.
Notably, the investment wave includes major commitments from Google ($25 billion), Amazon ($20 billion), and CoreWeave ($6 billion) to develop regional data center capacity. Blackstone, one of the world’s largest owners of data center infrastructure, also pledged $25 billion, underscoring the scale of the trend.
While this momentum is clearly bullish for the broader AI theme, what stands out in our view is a shift in capital allocation: for the first time, energy infrastructure — not GPUs or networking gear — is taking the lead. Of the $92 billion in total announced, $56 billion is earmarked for power generation, transmission, and grid upgrades, compared to “only” $36 billion for data centers.
Key energy projects include: Blackstone allocating a significant portion of its spending to back natural gas power plants in partnership with utility PPL; FirstEnergy investing $15 billion to strengthen grid infrastructure and expand power distribution; Constellation Energy committing $2.4 billion to expand the Limerick nuclear power plant, adding ~340 MW of capacity; Google allocating over $3 billion to repower and modernize two hydropower plants in the state.
While one could argue that this spending allocation in Pennsylvania skewed towards power infrastructure may not be fully replicable elsewhere — given the state’s unusually large power generation infrastructure and abundant energy assets that make data center co-location with power sources relatively easy — the broader implication is clear: electric power capex, which just started to pick up, has significant room to play catch-up with traditional AI-related spending.
And indeed, recent results from electric infrastructure players such as ABB show that the tide is rising, with the company’s Electrification division organic order growth jumping to 9% in Q2 from 2% in Q1, buoyed by data centers acceleration and continued strong demand from electric utilities.
Importantly, we expect this volume growth acceleration across the power equipment industry to come with favorable pricing and margin conditions. Various segments of the market are already tight and are witnessing price increases (e.g. gas turbines, transformers…). Red-hot demand stemming from the announced capex in Pennsylvania or the construction/upgrade of a large number of nuclear plants in the US and other parts of the world should only exacerbate the trend and give a massive boost to our portfolio companies’ margins and earnings growth over 2026-28.
