Vertiv Just Made an Up to $2.6 Billion Bet to Solve AI Data Centers' Biggest Bottleneck

Key Points

• Vertiv is buying Utility Innovations for up to $2.6 billion.
• The deal will extend the company's power value chain from the grid to the chip.
• On-site power is increasingly becoming the fastest solution.
• 10 stocks we like better than Vertiv ›

One of the biggest challenges facing AI data center developers isn't getting the chips that will serve as the digital brain of these facilities. It's securing the power needed to keep those chips running at full capacity. That's why Vertiv (NYSE:VRT) is spending up to $2.6 billion to acquire Utility Innovations. The deal will help it address the "time to power" problem and reduce time-to-revenue for companies that utilize these facilities.

Here's a look at the deal and how it will help solve the biggest bottleneck slowing down AI data center development.

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Details on the deal

Vertiv, which makes the equipment that keeps data centers running (power and cooling), is expanding outside the shell. It's acquiring Utility Innovations, a leader in microgrid solutions, advanced power controls, and behind-the-meter power architecture design for data centers. It's paying $1.45 billion in cash at closing, with an additional consideration of up to $1.15 billion based on achieving certain earnings targets over the next 12- and 24-month periods. Vertiv expects that the deal will be accretive to its earnings in the first year after closing.

The acquisition strategically extends the company's capabilities upstream to grid interconnect, adding microgrid controls, on-site generation, energy storage orchestration, and behind-the-meter power architecture. Adding these capabilities will enable Vertiv to help data center developers secure power more quickly, accelerating their ability to monetize these facilities. Vertiv will now cover the full power value chain, from the grid to the chip.

Accelerating "time to token"

Access to power has become the dominate issue for data center developers. "For AI data center operators, competitive advantage increasingly depends on how quickly they can move from site selection to first token," stated CEO Gio Albertazzi in the press release announcing the deal. That's leading more developers to bring their own power when the grid interconnect will take too long. Vertiv will be part of this solution, as Utility Innovations will add to its on-site power capabilities, including microgrid design and delivery, behind-the-meter power architecture design, and energy storage.

The need for speed has been a catalyst for the accelerating growth in demand for Bloom Energy's (NYSE:BE)fuel cells. Last year, it collaborated with Oracle to deliver power to data centers at the speed of AI, with an initial target of delivering onsite power for an entire data center in 90 days. Bloom delivered a fully operational fuel cell system in just 55 days, leading Oracle to significantly expand its partnership. Bloom's ability to quickly power data centers is driving blistering growth (100% revenue growth expected in 2026).

While Vertiv isn't growing quite as fast, it expects to deliver 31% sales growth this year at the midpoint of its guidance range and a 72% surge in earnings per share. The Utility Innovations deal should help power continued robust growth in 2027 and beyond.

An AI power name to know

Vertiv isn't the first name investors probably think about when evaluating AI investments. However, its power and cooling equipment are crucial to keeping the AI chips inside data centers powered, cooled, and running without interruption. It's now expanding beyond the shell to support the electrical interconnection between the building and the power source. That makes it an even more compelling opportunity for those seeking to invest in the AI power story.

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Matt DiLallo has positions in Bloom Energy and Vertiv and has the following options: long September 2026 $180 puts on Vertiv, short October 2026 $150 puts on Bloom Energy, and short September 2026 $220 puts on Vertiv. The Motley Fool has positions in and recommends Bloom Energy, Oracle, and Vertiv. The Motley Fool has a disclosure policy.