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If you blinked this week, you might have missed it. AES Corp. (NYSE:AES) is reportedly in advanced talks to be acquired by BlackRock Inc.’s Global Infrastructure Partners and EQT AB. Shares jumped nearly 7% on the news, pushing the market cap to roughly $12.4 billion. The deal could be announced as soon as next week, though terms are still fluid. For months, AES management has argued that public markets undervalue its renewables pipeline and data center exposure. Now, two of the world’s largest infrastructure investors appear ready to test that thesis with real money. The timing is notable. Electricity demand from AI data centers is surging, renewables EBITDA is up 46% year to date, and AES says it is entering an “inflection point.” The question for investors is simple: what do GIP and EQT see here that public markets have not fully priced in?
AI Driven Power Demand & Contracted Growth Visibility
One reason infrastructure investors may be circling AES is its deep exposure to AI-driven electricity demand. Data centers need power, and they need it fast. Management calls this “time to power.” AES has built a pipeline to meet that need.
The company has 8.2 gigawatts tied to data centers. About 4.2 gigawatts are already operating. Another 4 gigawatts sit in backlog or under construction. In 2025 alone, AES expects to sign 4 gigawatts of new PPAs, with 1.6 gigawatts already signed directly with data centers.
These are not speculative projects. Most are backed by long-term contracts. Returns are trending toward the upper end of AES’s 12% to 15% IRR range. More than half of new solar projects include batteries, which adds flexibility and pricing power.
For GIP and EQT, that kind of visibility matters. Infrastructure funds prize stable, contracted cash flow. AES has 11.1 gigawatts in backlog, giving three to four years of embedded growth. Management also outlined an additional $400 million of run-rate EBITDA beyond 2027 from projects already under construction.
That is the kind of forward earnings power private capital likes to underwrite. It reduces development risk and shifts the focus to execution. In a world where AI power demand remains strong, AES offers scale, contracts, and momentum in one package.
Renewables Scale & Safe Harbor Advantage
AES’s renewables business has grown quickly. Year to date, renewables EBITDA is up 46%. By year-end, U.S. installed capacity will be nearly 60% larger than it was two years ago. Scale brings purchasing leverage and construction efficiencies.
Another key factor is tax credit protection. AES says its 7.5-gigawatt U.S. backlog is fully safe harbored. It also has additional pipeline capacity with similar protections. That means projects can qualify for tax credits through 2030.
For infrastructure investors, policy certainty reduces risk. Safe harbor protections create a moat. Competitors without those positions may face higher costs or tighter timelines.
AES also says it has limited exposure to foreign entities of concern in its supply chain. Much of its equipment is already secured. Domestic sourcing ramps up further in 2026. In a tariff-sensitive environment, that matters.
GIP has invested heavily in energy and digital infrastructure. EQT recently raised a large infrastructure fund with an energy transition focus. AES sits squarely at the intersection of renewables, storage, and AI power demand.
Buying AES would give both firms immediate scale in U.S. renewables. It would also provide a platform to deploy additional capital. Infrastructure investors often look for platforms they can expand. AES appears built for that model.
Regulated Utility Base & Rate Growth Tailwinds
AES is not just a renewables developer. It owns regulated utilities in Indiana and Ohio. That steady rate base growth adds ballast to the story.
Management expects about 11% rate base growth at its utilities. In Ohio, transmission investments tied to data centers are under FERC formula rates. That structure reduces regulatory lag. By 2027, transmission could represent 40% of the rate base.
In Indiana, AES filed a rate case using a forward-looking test year. It also outlined scenarios for 1.5 to 2.5 gigawatts of potential new data center load. New load can spread fixed costs and support additional infrastructure investment.
For GIP and EQT, this mix is appealing. Regulated utilities provide predictable returns. Renewables offer growth. The combination diversifies risk within one company.
Private infrastructure owners often favor assets with both contracted revenue and regulated earnings. AES checks both boxes. It also maintains investment-grade credit ratings, which lowers financing costs.
If taken private, AES’s utilities could support stable cash flow. Meanwhile, renewables growth could drive equity value. That dual engine is difficult to replicate from scratch.
Valuation Gap & Public Market Discount
Management has been clear. They believe AES trades at a discount to peers. Bloomberg Intelligence has echoed that view, citing balance sheet concerns and international exposure as overhangs.
Looking at the numbers, AES trades around 15.3x LTM EV/EBITDA. LTM EV/EBIT sits near 26.8x. Price to earnings is roughly 11.4x on a trailing basis. Forward EV/EBITDA is closer to 17x.
Those multiples are not distressed. Yet they may be modest relative to long-term growth expectations. The company guides to 5% to 7% EBITDA growth through 2027, with a step-up to low teens next year.
Infrastructure investors may see room for operational improvement. AES has already executed $150 million in cost savings, targeting a $300 million run rate in 2026. Asset sales have reduced drag from legacy businesses.
Private ownership can allow longer-term capital planning. It can also simplify messaging. AES emphasizes EBITDA over EPS because of tax credit timing. In private hands, that lumpiness matters less.
If GIP and EQT believe public markets are underappreciating the backlog and post-2027 EBITDA, they may view today’s valuation as an entry point rather than a ceiling.
Final Thoughts: A Platform With Promise, But Not Without Tradeoffs
AES presents a compelling mix of renewables growth, data center exposure, and regulated utility stability. Its 11.1-gigawatt backlog and projected $400 million of incremental post-2027 EBITDA provide clear visibility. Investment-grade ratings and cost savings add comfort.
At the same time, leverage and capital intensity remain realities. Infrastructure projects require ongoing investment. Regulatory outcomes in Indiana and Ohio still matter. International exposure has previously weighed on valuation.
On valuation, AES trades near 15.3x LTM EV/EBITDA and about 11.4x trailing earnings. Forward EV/EBITDA is approaching 17x. These levels suggest the market recognizes growth but still applies a discount versus some pure-play renewables names.
For GIP and EQT, the appeal likely lies in scale, contracted cash flow, and expansion optionality. For shareholders, the calculus depends on whether private buyers can unlock more value than public markets currently assign.
Whether a deal materializes or not, the interest alone underscores a broader point. In an AI-powered world hungry for electricity, companies like AES sit at the center of the grid.
Disclaimer: We do not hold any positions in the above stock(s). Read our full disclaimer here.
