OpenAI’s announcement yesterday that it will help build what could be the largest fossil-fired power plant in the US shows the scale that Big Tech and its financiers are chasing in the AI energy race. But the risk that such projects could turn into multibillion-dollar boondoggles has some Wall Street shops looking for safer corners of the power market in which to park their money.
The OpenAI project, which also involves Japan’s SoftBank, the US government, and Nvidia, is the most extreme manifestation yet of the “bring your own power,” off-grid approach to data centers that the Trump administration has been pushing as the solution to satiating AI’s appetite without raising everyone else’s bills.
But to Jeff Jenkins, co-founder of the Louisiana-based private equity firm Bernhard Capital Partners, it sounds a little too much like the early 2000s. Back then, Jenkins (and many of his peers) lost a lot of money building power plants when the rush of electricity demand that was supposed to be unleashed by deregulation never really materialized. The AI boom appears to be on more solid footing (or, at least every Wall Street guru from Larry Fink down thinks so). But Jenkins is still more comfortable when his investment is guaranteed by the government.
In a state with a deregulated electricity market like Ohio, where the OpenAI project will be located, power plant operators compete on prices, which move according to supply and demand. In regulated states like Louisiana or Florida, utilities operate as monopolies and power prices are fixed through a regimented legal process. In the regulated market, returns for investors are never jaw-dropping, but they’re reliable. The trouble for a firm like Bernhard was that the big utilities rarely put anything up for sale, so there were few chances to break in. But that’s changing, Jenkins told me.
Utilities like Duke and AEP need to raise billions of dollars for their AI buildouts. Increasingly, they are scrambling to sell off non-core chunks of their regulated businesses to raise that cash, and willing to cut good deals with buyers. Bernhard has completed half a dozen acquisitions of regulated gas and power utilities around the country in the past two years, Jenkins said, including a Louisiana power company that has a deal with Meta to build a new gas-fired power plant for the sprawling Delta Forge 1 data center.
“This is totally unique from an investor standpoint, because people haven’t seen these assets [for sale] in 20 years,” Jenkins said. “When you can buy a regulated monopoly at a discount, you do it.”
The rush of private capital into utilities — global PE investment in the sector topped $69 billion in 2025, 50% above the previous year — raises some red flags. For one, there’s a major climate impact, since most of the new hyperscale projects will be powered by gas. And in an election year, when energy prices will loom over every candidate, regulated utilities in particular will be under the microscope to prove they can isolate the costs of serving new data centers and not bake them into broader rates. (A Meta spokesperson pointed me to a statement from Louisiana Gov. Jeff Landry in which he says the Delta Forge project is “committed to the principles outlined in President Trump’s Ratepayer Protection Pledge”).
Jenkins is thinking further ahead: “After this big supercycle of building, those same utilities will go right back to buying,” he predicts. And when that happens, he’ll be waiting to sell them back their old assets at a markup.