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AI is the biggest technological breakthrough of the last 20 years.
But there’s one thing standing in the way of AI’s future: energy.
AI energy consumption is expected to double by 2026. The data centres that enable artificial intelligence are beginning to grow so large that the energy grid is struggling to keep up. Simply training an AI data model uses more energy than 100 households do in one year. Next-generation AI data centres will need as much power as some cities. Moreover, power has to be available 24/7.
Canadian businesses are stepping up to power the breakthrough. These three companies could be set to capture significant profits powering the AI Revolution – and serious gains for investors.
AI Revolution Stock #1:
Brookfield Renewable Partners (TSX: BEP.UN)
Brookfield Renewable Partners (TXS: BEP.UN) is a global leader in the renewable energy sector, operating a diversified portfolio that spans across hydroelectric, wind, solar, nuclear power, and energy storage facilities. This extensive reach not only underscores its commitment to sustainable energy but also positions Brookfield Renewable as a key contributor to AI revolution.
An important aspect of Brookfield Renewable’s identity and strategy is its close relationship with its parent company, Brookfield Corporation (TSX:BN). This connection provides the renewable energy giant with several strategic advantages including financial strength, operational expertise, and an expansive global network. With the highest credit rating in its industry, Brookfield Renewable’s low cost of capital translates into higher profitability and makes projects economically attractive to Brookfield that might not be as attractive to a competitor.
Brookfield Renewable is well-positioned to become a preferred energy provider to the AI industry. The company currently has 43 gigawatts of renewable power operating capacity and an astounding 227 gigawatt development pipeline. Ninety percent of that development pipeline is located in the top 10 global data center markets.
In May 2024, Brookfield Renewable and Microsoft (NASDAQ: MSFT) announced a first-of-its-kind framework agreement to support Microsoft’s growing energy demands by developing new renewable energy resources. As Brookfield shared in the press release announcing the deal
The agreement provides a pathway for Brookfield to deliver over 10.5 gigawatts of new renewable energy capacity between 2026 and 2030 in the U.S. and Europe. The agreement includes the potential to increase its scope to deliver additional renewable energy capacity within the U.S. and Europe, and beyond to Asia-Pacific, India, and Latin America, and provides an incentive for Brookfield to build a large portfolio of new renewable energy projects over the coming years.
Notably, the agreement will include more than just wind and solar, contemplating “new or impactful carbon free energy generation technologies” (nuclear power, perhaps?). To put this news in perspective, this deal is almost eight times larger than the next biggest corporate power purchase agreement ever signed.
Speaking of nuclear power, another underappreciated growth lever for Brookfield Renewable is its 51% stake in Westinghouse Electric Company. Westinghouse is a global leader in nuclear power plant design, maintenance, and fuel supply, with a presence in more than half of the world’s nuclear reactors. As countries and corporations increasingly turn to nuclear energy to meet ambitious decarbonization and 24/7 energy reliability goals, Westinghouse stands to benefit from a revival of nuclear power as a safe, zero-carbon baseload resource. Brookfield Renewable’s involvement in Westinghouse gives the company a unique seat at the table as nuclear enjoys renewed attention from policymakers and investors seeking proven ways to support the world’s growing electrification needs—especially as AI, data centers, and electrified industries drive surging round-the-clock demand. With this diversified approach, Brookfield Renewable is well positioned to capture AI power opportunities across the energy spectrum.
With the coming growth in AI power demand and big tech companies like Microsoft seeking out clean energy to meet that demand, Brookfield has a secular tailwind at its back that doesn’t appear likely to slow anytime soon. Now could be a great time to invest in this global leader in clean energy generation and development.
