Exclusive: Sen. Warren wants info on private equity deals for data centers

Exclusive: Sen. Warren wants info on private equity deals for data centers

Sen. Elizabeth Warren (D-Mass.) on Friday sent letters to four large infrastructure investors, requesting more information on their data center deals, Axios has learned.

  • She's specifically interested in possible overlaps between ownership of data centers and utilities (i.e., the demand and supply), but does not allege any wrongdoing.

    • Why it matters: There is growing political anxiety over data centers that underly the AI revolution, particularly as energy prices rise, and private equity's involvement pours populist fuel on the fire.

    Driving the news: Warren, ranking member on the Senate Banking Committee, sent letters to BlackRock, Blackstone Group, Brookfield Infrastructure Partners and KKR.

  • They request information on investments in data center companies, including any changes to financial structure and operations, plus of other companies in the data center supply chain.
  • They also ask for "documentation to show your efforts to mitigate regulatory risks that accompany owning data centers" and "an explanation of how you are ensuring that your significant footprint in both energy supply and demand will not allow you to increase energy costs and exploit American people."
  • The firms either declined comment or haven't yet responded to requests for comment by Axios.

    • Zoom in: Sen. Warren sends lots of letters to Corporate America, including to investment firms, but this one is tapping at the bipartisan zeitgiest.

  • Consumer electricity prices are soaring. There's disagreement over the level of data center culpability, but that doesn't diminish the finger-pointing.

    • Reality check: Warren also seems to have latent fears of an AI bubble, and how the dominos could fall.

  • For example, if a PE firm were to own both a data center and a utility in the same market, and the data center goes bust due to decreased AI demand, then the utility might raise consumer prices to offset the losses.
  • This just doesn't track with how private equity firms manage their portfolios, at least historically.

    • The bottom line: Expect data center debates to grow louder as the money grows larger.