Bloom Energy (BE) enters into agreement with Brookfield to power AI data centers

Actions of Flowering Energy soared early Monday after striking a deal with Brookfield Asset Management to install fuel cells in artificial intelligence data centers.

Brookfield will spend up to $5 billion to deploy Bloom Energy’s technology, the first investment in its strategy to support large AI data centers with power and IT infrastructure. Bloom’s fuel cells are “fuel flexible” and can run on natural gas, biogas or hydrogen, the company says.

Brookfield and Bloom are collaborating to design and build what they call “AI factories” around the world, including a site in Europe that will be revealed before the end of the year.

Shares of Bloom Energy jumped nearly 30% in early trading. Bloom’s fuel cells provide on-site power that can be quickly installed because they do not rely on a grid connection.

Bloom has already positioned hundreds of megawatts of fuel cells in deals with utilities including American Electric Power and data center developers such as Equinix And Oracleaccording to the company.

Data center projects in the AI ​​industry are gaining momentum. Nvidia and OpenAI, for example, recently announced a partnership to build 10 gigawatts of data centers, the equivalent of the energy consumed by New York City at the height of summer.

But AI companies’ plans run up against an aging U.S. power grid that is often slow to deliver additional electrical capacity. Data centers also threaten to increase electricity prices for residential customers.

Deploying “behind the meter” or off-grid power solutions “is critical to bridging the grid gap for AI factories,” said Sikander Rashid, Brookfield’s global head of AI infrastructure.

“AI infrastructure must be built like a factory, with purpose, speed and scale,” said KR Sridhar, CEO of Bloom Energy.

Nvidia CEO Jensen Huang told CNBC last week that the AI ​​industry will need to generate electricity from the power grid to quickly meet demand and protect consumers from rising electricity prices.

“Self-generated energy from data centers could scale much faster than if it were put on the grid and we need to do that,” Huang said.