DigitalBridge buys ArcLight as AI data center demand boosts fossil fuel assets

By AI, Created 9:46 PM UTC, May 28, 2026, /AGP/ – DigitalBridge is acquiring ArcLight Capital Partners, linking a major data center investor to one of the largest private fossil fuel power portfolios in the U.S. The move comes as AI-driven electricity demand gives aging coal and gas plants fresh economic value and intensifies scrutiny of private equity’s role across the data center and energy sectors.

Why it matters: - The deal ties AI data center growth directly to fossil fuel infrastructure that utilities and policymakers are increasingly keeping online to meet rising electricity demand. - Private equity firms are now positioned both to finance data center expansion and to own the power plants, pipelines, and fuel assets that support it. - The overlap raises concerns that the costs and health impacts of powering AI infrastructure will be shifted onto the public.

What happened: - DigitalBridge announced Wednesday that it is acquiring ArcLight Capital Partners. - DigitalBridge is a major digital infrastructure and data center investor. - ArcLight is one of the largest private owners of fossil fuel power infrastructure in the United States. - The acquisition links DigitalBridge’s data center portfolio with ArcLight’s coal, gas, pipeline, and power generation assets. - The announcement came in Boston on May 28, 2026.

The details: - DigitalBridge is already invested across the data center ecosystem through DataBank, Switch, and Vantage Data Centers. - Those companies collectively account for more than 1.3 gigawatts of active U.S. data center IT capacity. - Private Equity Stakeholder Project research found that private equity firms now own or have significant joint ventures with nearly half of the top 25 U.S. data center companies. - ArcLight owned about 20.8 gigawatts of power generation capacity as of June 2025, according to Utility Dive. - ArcLight’s portfolio spans oil and gas extraction, pipelines and transport, gas-fired power plants, and coal-fired generation. - ArcLight owns stakes in the Keystone and Conemaugh coal plants in Pennsylvania. - Those plants were recently given a pathway to remain open until 2032 amid concerns about tightening electricity supply tied in part to planned data center development. - President Donald Trump publicly took credit for helping keep the plants open. - Private Equity Climate Risks consortium analysis found that nearly 80% of ArcLight’s energy portfolio companies were fossil fuel companies as of January 2026. - The consortium estimated in 2024 that ArcLight-backed fossil fuel assets produced at least 54 million metric tons of carbon emissions annually. - Those assets were associated with up to $3.7 billion in annual public health costs last year, including hundreds of premature deaths and tens of thousands of asthma incidents tied to fossil fuel pollution. - ArcLight co-owned the Gavin coal plant in Ohio for almost a decade. - The Gavin coal plant was one of the highest-emitting and deadliest coal plants in the country. - ArcLight was also among the owners of Third Coast Midstream, which was fined over a 2023 Gulf of Mexico oil spill. - Less than a year after the spill, Third Coast raised new debt financing that funded a roughly $74 million payout to owners, including ArcLight. - ArcLight also owned the Lime Tree Bay refinery in the U.S. Virgin Islands before the facility was shut down after repeated incidents involving oil droplets and toxic emissions affecting nearby communities. - PESP has increasingly documented private equity’s role in both financing the data center buildout and owning the energy infrastructure that powers it. - A recent S&P analysis found that private equity investment in U.S. data centers reached $45.7 billion in 2025, accounting for roughly 72% of total investment in the sector.

Between the lines: - The acquisition suggests private equity is consolidating control over two parts of the same supply chain: demand from AI infrastructure and the fossil fuel power needed to serve it. - ArcLight’s assets show how data center growth can create political and financial support for extending the life of older coal and gas plants. - The climate and health figures underscore that the data center boom may carry costs beyond electricity prices and grid reliability.

What’s next: - DigitalBridge and ArcLight will move through the acquisition process. - Utilities, regulators, and policymakers are likely to face more pressure to justify keeping fossil fuel assets running as AI electricity demand rises. - PESP and other watchdogs are likely to keep focusing on private equity’s footprint across both digital infrastructure and energy supply.

The bottom line: - The deal makes the AI buildout and the fossil fuel power system that feeds it look less like separate markets and more like one integrated private equity business.