Securities Regulation Daily Wrap Up, AI NEWS—Warren launches probe of private equity data center investments, citing rising utility costs, (Jun 17, 2026)

By Patricia K. Ruiz, J.D.

Warren seeks detailed disclosures on financing, infrastructure control, and consumer impacts.

Senator Elizabeth Warren (D Mass.), ranking member of the Senate Banking Committee, announced an investigation into private equity investment in data centers and published letters to Blackstone, BlackRock, Brookfield Infrastructure Partners, and KKR & Co. The inquiry focuses on the firms’ growing role in funding and operating data center infrastructure amid rising utility costs for consumers. The letters request extensive disclosures on investments, financing structures, and safeguards to prevent increased costs or consumer harm, with responses due by June 27.

In a press release, Warren said she is probing the firms’ “increased involvement in data center developments and operations as rising utility prices continue to put pressure on American families.” The release also quotes Warren warning that “private equity’s increased footprint in the data center industry threatens to make existing problems even worse,” referencing rising costs, environmental concerns, and increased debt financing tied to artificial intelligence infrastructure.

Rapid growth in AI-driven infrastructure. The accompanying letters describe a rapidly expanding sector driven by AI demand. They state that AI and large technology companies are expected to spend nearly $3 trillion on data center construction and maintenance by 2028, with only about $1.4 trillion financed internally, leaving a $1.6 trillion gap increasingly filled by private equity. Warren similarly highlights that private equity investment reached $45.70 billion in 2025 and is projected to total approximately $350 billion by 2028.

Across the letters, Warren identifies major transactions involving the targeted firms, including KKR and Global Infrastructure Partners’ $15 billion acquisition of CyrusOne; BlackRock’s $12.5 billion acquisition of GIP; Brookfield’s 2024 merger of Cyxtera and Evoque to create Centersquare; and Blackstone’s acquisition of QTS for at least $10 billion. The press release reiterates these examples, noting their scale and geographic reach, including CyrusOne’s 50 data center facilities serving 800 clients across multiple regions.

Lifecycle control and financing structures. The letters emphasize that private equity firms have expanded across the full data center lifecycle, including land acquisition, facility operation, and related services. A central concern is the use of leveraged buyouts, which the letters state were employed in a majority of 451 data center-related private equity deals between 2022 and 2024, placing acquisition debt on portfolio companies. The documents state such financing structures may increase bankruptcy risk and could have broader implications for financial stability and digital infrastructure if companies fail.

Electricity demand and utility costs. Warren underscores the connection between data center growth and rising electricity demand. It cites a 2026 study estimating that U.S. electricity use attributable to data centers rose from 1.9 percent to 4.4 percent between 2018 and 2023, and that national electricity costs could increase between 6 percent and 29 percent by 2030, with some states seeing increases of up to 57 percent. The letters likewise state that utilities are expanding generation and transmission infrastructure to meet demand, with costs frequently distributed across ratepayers.

Environmental and community impacts. Warren’s letters raise environmental and community concerns associated with data center expansion, including water use, emissions, noise, and strain on local resources. According to the letters, private equity firms accounted for more than 70 percent of data center investments in 2025 and that this level of involvement may exacerbate existing impacts. The letters further highlight private equity firms’ dual role in both energy supply and demand. They state that firms not only invest in data centers but also hold stakes in energy infrastructure, including more than 150 fossil fuel power plants as of 2025. This positioning, according to the letters, raises questions about the firms’ influence over electricity markets and consumer costs.

Requested disclosures. Each letter sets out detailed information requests. These include disclosures about all data center investments, including acquisition terms, locations, governance structures, and financial or operational changes made after acquisition. The firms are also asked to identify roll-up transactions and provide information about investments across the broader data center supply chain. In addition, the letters request detailed information about procedures in the event of a data center bankruptcy, including financial transfers, creditor relationships, and impacts on consumers. The firms are also asked to provide documentation of efforts to mitigate regulatory risks. Finally, Warren asks the firms to explain how they ensure their activities do not increase energy costs or exploit consumers, framing the inquiry around the potential impact of private equity ownership on household utility bills and broader public costs.

Companies: Blackstone; BlackRock; Brookfield Infrastructure Partners; KKR & Co.; CyrusOne; GIP; Cyxtera; Evoque; Centersquare; QTS

LegislativeActivity: AINews