Data center developers may be forced into owning and operating power plants as a necessary evil to secure power capacity, according to panelists at the S&P Global Power Markets Conference in Las Vegas.

Speakers on the Data Centers, AI, and Electrification: Meeting the New Load Surge panel on 13 April shared their perspectives on whether the market would see more hyperscalers purchasing independent power producers (IPP) to power their projects across the US.

“I certainly don’t know, but it wouldn’t surprise me to be honest if a hyperscaler did acquire an IPP,” said Geoffrey Allen, VP of structured energy transactions at CyrusOne. “It’s such a critical component of what we’re doing.”

Conversely, Allen added data center developers can look to partnerships to avoid owning and operating the generation project itself. This idea mirrors CyrusOne’s approach to the situation.

“We’re a data center company. We own and operate data centers. We don’t have a desire to own generation, but we’re increasingly looking to establish partnerships to solve the challenge that’s in front of us,” said Allen.

CyrusOne announced in January 2026 a partnership with GIP-backed clean energy developer Eolian for the development of the 200 MW Data Center Campus located in Fort Worth, Texas.

The data center, named DFW7, is contracted to provide digital infrastructure capacity to hyperscalers and enterprise businesses, according to the announcement. The project – which sees CyrusOne developing a large-scale data center at an existing utility-scale Eolian battery energy storage site – commenced construction in April 2025 and is expected to begin operations this year.

GE Vernova’s managing director of power and development, Vimal Chauhan, referenced the Google and Intersect deal that closed last month. In the deal, the tech giant acquired the IPP for USD 4.75bn plus assumption of debt, spinning off Intersect’s grid-tied power business in the process to form new independent company IPX Power.

“There could potentially be other similar transactions where hyperscalers are setting up their own development platforms,” added Chauhan.

GE Vernova joined power giant Chevron and reindustrialization investment firm Engine No 1 in partnership to build a new development platform for scalable reliable power solutions for US-based power plants running on natural gas.

The joint development, announced January 2025, aims to establish the first multi-GW scale co-located power plant and data center during President Donald Trump’s second term, the first projects securing GE Vernova 7HA natural gas turbines under a slot reservation agreement under an accelerated timeline, per the announcement.

Engine No. 1 also has a separate joint venture with Crusoe that will provide powered data center real estate solutions to the artificial intelligence community.

Carim Khouzami, executive vice president of Transmission and Development for Exelon, showed skepticism that hyperscalers will become power plant owner-operators. “I would say I don’t know if a hyperscaler is going to buy an IPP,” he said.

“Many of the ones that we talked to have no interest in owning generation. But, if you get to a certain point where there is no other solution, maybe they get pushed to that solution.”

Khouzami mentioned the recent legislative actions of several states, requiring hyperscalers or data center developers to bring their own generation, either through partnerships or development. According to law firm Pillsbury’s February 2026 analysis of the bring-your-own-generation (BYOG) trend in state legislation, there are several states taking this pathway, including North Dakota, Oklahoma, Texas, Wyoming, California, New Jersey, Virginia, and several more.

With a dearth of alternative solutions, a legislative requirement, could advance IPP purchases by hyperscalers in the market, added Khouzami.

“Do I think hyperscalers will build generation? Yes. I think they’ll partner with an IPP or a utility or some entity that will own the asset. I don’t think they have interest in owning or operating these assets,” added Khouzami.

Hybrid approach to regulation 

The panelists also underlined the need for more generation in markets that are deregulated, arguing a hybrid approach that encourages competition with IPPs, but also prioritizes getting power online – especially in PJM.

Panelists emphasized that capacity markets were developed to support incremental growth, not the AI boom that is causing rising demand. While IPPs have continued to buy and sell assets, new greenfield generation is not being developed at speed and scale to match demand.

“We’re seeing a lot of generation change hands in sales and purchases, but it’s the same generation. Maybe a few upgrades here and there, which is helpful as well,” said Khouzami.

Khouzami compared un-regulated PJM to other parts of the country, such as Georgia, where commissions order power market actors to build. Excelon operates within PJM, covering markets in Illinois, Pennsylvania, Maryland, New Jersey, Delaware, and Washington, D.C, according to its website.

In markets such as Georgia, the Georgia Public Service Commission will tell utilities to build to meet projected demand. Khouzami still sees regulated markets as part of the solution, especially when meeting demand means building 15 GW across PJM, he added.

“We’re not looking to re-regulate our states. That’s a narrative that’s out there that isn’t true,” he said. “We are looking for a hybrid approach, where the competitive market is alongside a regulated generation market.”

Chauhan agreed, stating that what’s needed is a mechanism that incentivizes generation to be built, whether it’s regulated generation or another long-term capacity contract.

“I hope the IPPs will build, but again, if they don’t, we stand ready to do so, because someone needs to build,” Khouzami added.