Shares of Dominion Energy surged in trading on Monday after utility giant NextEra Energy announced plans to acquire the company in a $66.8 billion deal that would create the largest electric utility operator in the United States.
Dominion shares (D) rose about 10% following the announcement, while NextEra Energy stock slipped more than 3.6% as investors weighed the scale of the transaction and the integration challenges ahead.
The deal comes as electricity providers across the United States race to expand infrastructure and generation capacity to meet an unprecedented rise in power demand driven by artificial intelligence data centers.
The companies said the transaction would be structured primarily as a stock deal and would combine two of the country’s largest power operators into a massive East Coast utility with operations spanning Florida, Virginia, and the Carolinas.
The merger will require approval from a wide range of state and federal regulators.
AI boom reshapes utility industry
The proposed combination reflects how the rapid buildout of AI infrastructure is reshaping the US utility sector and reviving electricity demand growth after decades of stagnation.
Power availability has become a crucial factor for technology companies rushing to build new data centers, many of which require enormous and continuous electricity supplies.
New AI-focused data centers can consume as much electricity as around 1,000 Walmart stores operating simultaneously, according to industry estimates.
Beyond AI, utilities are also grappling with rising demand from electric vehicles, manufacturing facilities, and expanding residential consumption.
The industry is expected to invest tens of billions of dollars in new power plants, battery storage systems, transmission networks, and grid upgrades over the coming years.
Florida-based NextEra currently has a market value of nearly $200 billion, while Virginia-based Dominion is valued at roughly $50 billion.
NextEra owns Florida Power & Light, the largest electric utility in the United States, and is one of the country’s biggest developers of renewable energy, battery storage, and transmission infrastructure.
While traditionally viewed as a clean-energy leader, NextEra has increasingly embraced natural gas as part of its strategy to meet surging electricity demand.
Chief Executive John Ketchum has advocated an “all of the above” approach to power generation and has argued that data center developers should also contribute dedicated energy capacity to support their projects.
Dominion’s data center exposure draws attention
Dominion Energy has emerged as one of the key beneficiaries of the AI infrastructure boom because of its dominant presence in Virginia, home to the world’s largest concentration of data centers, often referred to as “data center alley.”
The company operates regulated utilities in Virginia and the Carolinas and owns gas-fired power plants that sell electricity into wholesale markets.
Dominion currently has nearly 51 gigawatts of contracted data-center capacity and counts major technology firms, including Alphabet, Amazon, Microsoft, Meta, Equinix, CoreWeave, and CyrusOne among its customers.
Dominion Chief Executive Robert Blue said at the CERAWeek conference in Houston earlier this year that the company had connected more than 450 data centers in Virginia since it began tracking the sector.
Last year, data centers accounted for 28% of Dominion’s electricity sales in the state, highlighting the growing importance of AI infrastructure to utility earnings.
Blue said the industry had not witnessed such strong demand growth since the years following World War II.
Utilities pivot to infrastructure expansion
The transaction also highlights the strategic importance of scale as utilities prepare for a long-term investment cycle tied to artificial intelligence and electrification.
NextEra has already been expanding partnerships linked to AI infrastructure growth.
In December, the company announced a collaboration with Google Cloud to build large-scale data center campuses paired with power generation facilities across the United States.
Last year, NextEra and Google also announced plans to restart a nuclear reactor in Iowa that had been shut since 2020 after sustaining wind damage.
The Dominion acquisition would significantly strengthen NextEra’s position in one of the fastest-growing electricity demand corridors in the country, while giving the combined company a major foothold in supplying power to the rapidly expanding AI economy.
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