AI infrastructure is far from finished? PE giant Apollo: The energy demands of AI “cannot be met in our lifetime”

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An executive at private equity giant Apollo Global Management has issued a warning, stating that the massive energy demands of artificial intelligence pose a huge gap with the current global electricity supply—a gap so severe that it may not be bridged within our lifetimes.

“The gap between the energy required by AI and the global grid’s power generation and transmission capacity is enormous, and it can’t be closed in our lifetime,” said Dave Stangis, who has led and formulated Apollo’s sustainability strategy for the past four years, in an interview.

Stangis’ view suggests that investors focused on sustainable energy will need to accept a new reality: renewable energy alone will be insufficient to power the AI era. As a result, global investors and industry players are shifting from the previous mindset of "energy transition" to a more urgent "energy addition" model.

For Apollo and other deep-pocketed investors, this challenge also brings opportunities. Stangis noted that due to the AI data center construction boom, there is a global “scramble to add every type of electricity source,” creating a unique window to deploy private capital in power generation, transmission, storage, and related infrastructure.

The New Reality of "Energy Addition"

Stangis emphasized that what’s happening now is “energy addition,” rather than a narrow energy transition. This means that to meet the explosive demand brought by AI data centers, the world not only needs to shift to low-carbon energy but must also greatly increase overall energy supply.

This shift is reshaping how the entire financial industry views energy investment. In the past, sustainable investing mainly focused on transitioning from high-carbon to low-carbon energies; now, its economic logic is merging with an unprecedented logic of “supply growth.”

“So, there’s no doubt that what’s happening globally can be called ‘energy addition’,” Stangis said. He believes that sustainable energy investors must recognize that renewable energy alone cannot meet demand.

As an alternative asset management giant, Apollo states that it hopes to play a key role in this shift. The company considers investment in clean energy and decarbonization technologies to be a profitable strategy.

Since 2022, Apollo has committed or arranged about $60 billion in investments related to energy transition, infrastructure, and sustainability, which is already more than half of its $100 billion investment goal for 2030. One concrete example is that in August, the company agreed to acquire a majority stake in Stream Data Centers, marking its first such acquisition as part of its race to build out digital infrastructure.

To guide its investments, Apollo has also designed its own classification standards. According to Stangis, this internal framework—thanks to its “deep analysis” of industry and technology—has given the company a “competitive edge” in the market. For a project to be considered a “transition deal,” most of its revenue must be related to transition activities, or the financing must have a designated transition use, or it must have industry-recognized leading certifications (such as LEED Platinum in real estate).

Political Headwinds Do Not Change the Overall Investment Trend

Although renewable energy investment faces a shifting political environment in the US, Stangis says it hasn’t changed the broader investment opportunity. He admitted:

“Without a doubt, the external world around transition investing has changed. From a policy perspective, certain technologies are more favored today than a few years ago, while others are not.”

Trump administration policies have made green energy investments like wind power more complicated, as they favor nuclear and geothermal instead. But Stangis emphasized:

“We still see trillions of dollars in opportunities—this has not changed, and is only growing.”

This view is quite representative among financial giants. Despite facing policy headwinds, BlackRock Inc. still describes the low-carbon transition as a “superpower”; companies like Brookfield Asset Management, Blackstone Inc., and TPG Inc. have all raised billions of dollars in funds dedicated to this theme.

Finally, Stangis balanced his view. He thinks that the transition to low-carbon energy has begun and is unstoppable, but that the urgent need to fuel the AI boom means the world needs more energy:

“‘Energy addition’ is a fact, and I believe ‘energy transition’ is equally undeniable.” He added that storage, transmission, and distribution capacity will be key drivers of success.

It’s reported that Stangis will soon move to a senior advisor role at the company, with his Chief Sustainability Officer (CSO) position being taken over by Jaycee Pribulsky from Nike Inc. Pribulsky, in a joint interview with Stangis, said she plans to build on Apollo’s current strategy.

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