Those two agreements, combined with another undisclosed tech customer, increase the utility’s data center contracts to 4.5 GW from 3 GW, according to the company’s fourth-quarter earnings presentation. A gigawatt is roughly the output of one traditional nuclear reactor.
“We have a lot more in the hopper as well,” Chief Executive Officer Harry Sideris said on Bloomberg Television.
Terms of the Microsoft and Compass agreements weren’t disclosed.
The fast-paced build-out of US data centers has transformed the energy industry, with companies that sell electricity benefiting from the rapid increase in demand for their product.
Compass Datacenters, a digital infrastructure operator, is backed by Brookfield Asset Management and the Ontario Teachers Pension Plan. KKR & Company has invested in a portion of Compass’ operating data centers and future assets.
Duke Chief Financial Officer Brian Savoy said contracts with big tech firms protect the utility’s existing customers from paying for new infrastructure, touting provisions for minimum billing and refundable payments for new transmission lines required by data centers. “That keeps other customers from subsidizing these projects while they’re under construction,” he said.
Tunguz, who published a blog last year comparing the AI boom to past investment frenzies, says they don’t always end well. But on the way up, he said, “they are all huge catalysts for the economy.”
What is more certain is that investors who had rushed to buy the tech titans’ stocks over the past year have shown greater hesitance in the face of the skyrocketing capital spending across the board, in some cases selling even when their main businesses – from online advertising and web search to ecommerce and productivity software – have held steady and revenue has exceeded estimates.
“What’s spooking people? Definitely the analyst narrative and the rhetoric” about the pace at which AI will disrupt businesses, said Steve Lucas, chief executive officer of Boomi, a firm that helps companies stitch together their data and software.
“I would not debate the potential of AI,” he said. “I would absolutely debate the time frame, and I would passionately debate the economics.”
