Energy IPOs surge as investors hunt for ways to play AI boom - Ars Technica
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Energy companies are raising money at IPO at their fastest pace this century, taking advantage of investors’ hunt for new ways to bet on the boom in power-intensive AI data centers.
Initial public offerings for energy firms raised $12.6 billion in the first half of this year, according to data firm Dealogic. That marks the highest half-year level since the peak of the dotcom bubble in late 1999 and the highest first-half figure on record. It is well above 2025’s full-year total of $4.3 billion.
The surge in fundraising comes as access to the vast amounts of energy needed to run data centers emerges as a bottleneck in a multi-trillion-dollar AI investment boom.
“Investors started by buying AI-linked names like Nvidia. Then they said, ‘hold on, every chip needs energy to power it,’” said RBC clean energy analyst Chris Dendrinos. “That’s put a huge tailwind behind these companies.”
A typical AI-focused data center uses around 876,000 megawatt hours per year, roughly equivalent to the household electricity usage of Glasgow or Salt Lake City. US electricity demand is projected to increase 39 percent between 2026 and 2035, according to consultancy ICF, in large part due to ballooning demand from data centers.
Access to the vast amounts of energy needed to run data centers has become a bottleneck in a multi-trillion-dollar AI investment boom
Credit:<br>David Ryder/Bloomberg
Access to the vast amounts of energy needed to run data centers has become a bottleneck in a multi-trillion-dollar AI investment boom
Credit:
David Ryder/Bloomberg
Investors who have made huge gains betting on the chip stocks that have recently propelled US equity markets to a series of record highs are slowly shifting into the so-called “picks and shovels” companies expected to lay the infrastructure for the AI boom, analysts say.
“Power‑capacity expansion, US reshoring, [and] AI‑related infrastructure investment… remain our central strategic allocations,” said Manish Kabra, head of US equity strategy at Société Générale.
Exchange traded fund-provider GMO this week launched a “power infrastructure ETF” to capture the returns of stocks linked to “power generation, grid, and electrification infrastructure.” Energy group Standard Nuclear is expected to go public in the US later in July.
The 2026 IPO market will be remembered both for SpaceX and as “the year that financed the AI revolution’s infrastructure,” said Bill Smith, head of IPO data provider Renaissance Capital.
Among companies coming to market is Forgent Power Solutions, which designs and manufactures electrical distribution equipment used in data centers. It raised $1.7 billion from its IPO in February, capitalizing on strong demand and long wait times for technologies such as transformers and switchgears, which are used to protect electrical equipment.
Innio, a German gas engine manufacturer, completed a nearly $2.8 billion flotation in June, riding a trend of data centers bypassing the strained electricity grid and instead powering themselves on-site.
Companies that have been able to raise money on public markets include those involved in complex, capital-heavy projects such as nuclear and geothermal power plants, while investors have also been willing to back businesses trying to develop new technologies.
“This is a moment in which speculative projects are being funded and underwritten,” said Julien Dumoulin-Smith, a Jefferies research analyst covering power, utilities, and clean energy. “They’re not just limited to venture capital or private equity.”
Fervo—which went public in May, raising nearly $2.2 billion—is developing “next-generation” geothermal, using oil and gas drilling methods to create underground wells to tap heat. Unlike conventional geothermal, which is widely used and relies on naturally occurring heat pockets, next-generation geothermal is being deployed in pilot-stage projects in the US.
Companies that have been able to raise money on public markets include those involved in complex projects such as nuclear and geothermal power plants.
Credit:<br>Michael Nagle/Bloomberg
Companies that have been able to raise money on public markets include those involved in complex projects such as nuclear and geothermal power plants.
Credit:
Michael Nagle/Bloomberg
According to its prospectus, the company will spend $1.2 billion over the next year to develop its Utah power station.
Chief executive Tim Latimer told the FT that the company and its...