Abu Dhabi’s ADQ, U.S. PE firm to invest $25 billion in U.S. data center projects

Sovereign wealth fund ADQ and American private equity firm Energy Capital Partners, or ECP, have signed a deal for a $25 billion investment partnership dedicated to increasing power generation, primarily in the U.S., to serve data center needs, the companies announced Wednesday.

The partnership “aims to service the growing power needs of data centers, hyperscale cloud companies and other energy-intensive industries,” a joint statement by the firms read. “As the continuity and quality of power supply is crucial for these high-growth industries, the need for captive power plants that are in proximity is often a pre-requisite. The partnership is focused on meeting these needs over the long-term.”

The 50-50 partnership will deploy capital with the goal to invest more than $25 billion across 25 gigawatts worth of projects via greenfield site development, new builds and expansions of current infrastructure.

ADQ, established in 2018 in Abu Dhabi, United Arab Emirates, focuses on investments in critical infrastructure and global supply chains, while ECP describes itself as the largest private owner of power generation and renewable energy assets in the U.S. ADQ oversees $249 billion in assets, while ECP has raised more than $31 billion in capital commitments since its inception in 2005.

The partnership announcement comes at a time of rapidly increasing power needs — electricity demand is set to surge in the U.S. after staying largely flat for some 15 years, fueled by new data centers, factories, electric vehicles, and hotter and longer summers.

And as tech giants like Microsoft, Amazon and Google compete to take the lead in the artificial intelligence revolution, the data centers needed to power the burgeoning technology consume an ever-increasing amount of energy.

The U.S. Department of Energy, in a December 2024 report, estimates that data center load growth in the U.S. has tripled over the past decade and that total data center electricity usage is projected to double or triple by 2028.  

According to “a 2024 International Energy Agency report on electricity,” the data center sector in the U.S. “is expected to account for more than one-third of additional demand through 2026.” Globally, data centers’ total electricity consumption could reach more than 1,000 terawatt hours, or TWh, in 2026 — that’s up from an estimated 460 TWh in 2022 and “roughly equivalent to the electricity consumption of Japan,” the IAE said.

The deal comes as ADQ chairman and United Arab Emirates national security advisor Sheikh Tahnoon bin Zayed Al Nahyan visited Washington, meeting with President Donald Trump and Elon Musk, among other political and business leaders.

The UAE has worked to strengthen ties with the U.S. on AI and is seeking greater access to American technology in order to build its own infrastructure and diversify its economy away from hydrocarbons.

The small, oil-rich Gulf sheikhdom has been intensely pursuing investments in artificial intelligence, data centers and energy transition technologies as the race for AI dominance gathers pace.

UAE investment fund MGX last year teamed up with Microsoft and BlackRock to form a consortium with an initial goal of investing more than $30 billion in AI-related projects in the U.S. On Thursday, American chipmaking giant Nvidia and and Musk’s xAI announced they would be joining the project.