---
title: A $4.4 Billion Deal Is the Latest Bet on Powering AI Data Centres
description: Flex is paying $4.4 billion for EPC Power, one of a wave of deals betting on the electrical hardware behind AI. The real bottleneck may sit elsewhere.
author: Darie Nani (Editor-in-Chief)
date: 2026-09-04T16:35:38.841Z
updated: 2026-09-04T16:35:38.855Z
canonical: https://www.sovereignmagazine.com/article/flex-epc-power-ai-data-centre-power
image: https://cdn.nanimediahouse.com/ai-data-centre-power-249871.webp
categories: Markets
content_type: Analysis
region: United States
publication: Sovereign Magazine
schema_type: Article
---

Flex agreed on 3 September to buy EPC Power for $4.4 billion, a bet that electricity, and the equipment that shapes it, has become the scarcest thing in artificial intelligence. The deal, expected to close in the fourth quarter subject to regulatory approval, folds a maker of inverters, digital rectifiers and solid-state transformers into a contract-manufacturing giant that has spent two years assembling a data-centre power business. It is one of the larger purchases in a wave of similar deals, and money that once chased AI models and the semiconductors that run them is now moving into the unglamorous hardware that gets power from the grid to the rack.

The demand behind that shift is real and steep. US data-centre electricity use is climbing fast, with Gartner estimating roughly 26 percent growth in 2026. Forecasts put data-centre power draw near 41 gigawatts this year, up from about 31 gigawatts in 2025, and heading toward 66 gigawatts by 2027. Goldman Sachs [projects that US data-centre power demand roughly doubles by 2027](https://www.goldmansachs.com/insights/articles/us-data-center-power-demand-projected-to-double-by-2027).

## EPC Power designs the layer between the grid and the chip

EPC Power, based in Poway, California, makes software-defined power-conversion hardware: the inverters, digital rectifiers and solid-state transformers that step and shape electricity, along with 800-volt data-centre power architectures, utility-scale storage and microgrid systems. The company has deployed about 15 gigawatts of capacity across 62 countries. EPC says it is the leading US power-conversion maker for data centres and that it has expanded domestic manufacturing nearly tenfold, both its own figures rather than independently verified ones. Its 2026 plant in Fountain Inn, South Carolina, is independently reported to nearly triple prior capacity.

EPC becomes part of Flex's Cloud and Power Infrastructure segment, and it arrives with a well-connected roster. Its chief executive, Jim Fusaro, previously ran the solar-tracker maker Array Technologies. Since September 2022 the company has been majority-backed by Goldman Sachs Alternatives and Cleanhill Partners. Flex, led by chief executive Revathi Advaithi, has been moving toward this for a while, buying the electrical-products firm EP2 for about $1.1 billion earlier in 2026 and the liquid-cooling company JetCool in 2024.

One detail complicates the picture. Flex has said it [intends to spin off the entire Cloud and Power Infrastructure segment into a new, independent, publicly traded company](https://investors.flex.com/news/news-details/2026/Flex-Announces-Intention-to-Spin-Off-its-Cloud-and-Power-Infrastructure-Segment-into-a-New-Independent-Publicly-Traded-Company/default.aspx) in the first quarter of 2027. So Flex is folding EPC into a segment it has already said it will float as a separate public company within months of the deal closing.

## Everyone is buying the power layer at once

The EPC purchase counts as a signal rather than a one-off because of the company it keeps. Across 2025 and 2026, the largest names in the sector have paid up for power and cooling assets. Eaton bought Boyd Thermal for $9.5 billion. Vertiv acquired PurgeRite for more than $1 billion. Dycom bought a power-solutions business for $1.95 billion. Alphabet acquired Intersect Power for $4.75 billion. Against that run, the $4.4 billion Flex is paying for EPC looks large but ordinary, roughly comparable to what Alphabet paid for Intersect.

Together, the deals show where large investors expect the next scarcity to sit. The bet is that whoever supplies the electrical hardware of the AI build-out will earn from every new data centre, and that this supply is worth locking up now.

## The bottleneck sits downstream of what Flex just bought

The parts of the power system that actually delay a data centre are mostly not the parts EPC makes. The binding constraints sit further down the line, in the grid itself and the heavy equipment that connects to it.

Interconnection is the first constraint. Roughly 2,600 gigawatts of generation and storage capacity is queued to connect to the US grid, with waits exceeding five years. The regulator, FERC, issued emergency orders in June 2026 pushing grid operators to speed connections for AI data centres, a sign of how jammed the system has become. Data from PJM, the largest US grid operator, shows projects spending around three years in the interconnection queue and then four or more years after approval waiting on equipment and construction. Permitting accounted for about 29 percent of project-milestone changes and supply-chain constraints for about 23 percent.

The equipment is the second constraint. Lead times for power transformers have stretched from about 50 weeks in 2021 to between 120 and 210 weeks in 2024 to 2026. Large generator step-up units run about 144 weeks. Only about half of the 16 gigawatts of capacity targeted for 2026 is reported on track, with the rest slipping. In the first quarter of 2026, 75 projects worth about $130 billion were delayed or blocked, largely by local permitting and political resistance. None of that is a power-conversion problem, and none of it is solved by owning a company that makes inverters.

## Dozens of rivals are crowding into the same market

The specific market EPC sells into is also filling up quickly. The industry is standardising on 800-volt DC power architecture, driven partly by NVIDIA, and more than 80 vendors are now developing 800-volt products. Vertiv, Eaton, Delta and SolarEdge are all launching competing 800-volt lines in 2026. One market estimate has the 800-volt data-centre power-conversion market growing about 22.5 percent a year, from roughly $1.6 billion in 2025 toward $12 billion by 2035, a large and expanding pool that dozens of well-funded companies are entering at the same moment.

There is also a question about whether the demand curve is as steep as the deal-making assumes. Constellation Energy's chief executive has warned that utilities risk overbuilding for AI, and some analysts expect only 60 to 70 percent of announced capital spending to actually materialise. If a meaningful share of the projected megawatts never gets built, the vendors crowding into 800-volt conversion will be competing for a smaller market than current headlines imply.

## The deal shows where the money is going more than it eases the bottleneck

The deal is a strong signal. It marks, in real dollars, that the constraint on AI has moved from compute to power, and that serious money is repositioning around the electrical layer. Flex is buying real capacity, real deployments and a credible operator, in step with the biggest players in the sector.

What the deal does not do is ease the constraint the build-out actually runs into. The delays that push data centres past their timelines come from interconnection queues, transformer lead times measured in years, and permitting fights, not from a shortage of power-conversion hardware. Flex is buying into the one link in the chain where supply is arriving fastest and rivals are thickest, with more than 80 of them making the same 800-volt products. Its purchase is a bet on the sheer scale of AI power demand, made when that bet is most crowded and most expensive, and placed inside a segment it will spin off within months. It buys Flex a strong position in power conversion, and it does nothing to shorten the grid queues and equipment backlogs that actually hold data centres back.

## FAQ

**Q: What is power conversion, and why does a data centre need it?**
Electricity arrives from the grid at one voltage and form and has to be stepped, shaped and delivered to servers at another. Power-conversion hardware, including inverters, rectifiers and transformers, does that work. EPC Power makes this equipment, along with the newer 800-volt architectures data centres are adopting.

**Q: What is 800-volt DC power, and why does it matter here?**
It is an emerging standard for moving power inside data centres at higher voltage, which cuts losses and handles the density that AI hardware demands. NVIDIA has helped push the shift. More than 80 vendors are now building 800-volt products, which is why the market Flex bought into is both growing quickly and getting crowded.

**Q: What is grid interconnection, and why is it called the real bottleneck?**
Interconnection is the process of physically connecting a new power source or large load to the grid, including studies, approvals, equipment and construction. About 2,600 gigawatts of capacity is queued in the US with waits over five years, and PJM data shows projects waiting four or more years after approval for equipment and construction. Those timelines, not a lack of power-conversion gear, are what hold projects back.

**Q: Why does the planned spin-off matter to this deal?**
Flex has said it intends to spin off its entire Cloud and Power Infrastructure segment into a separate public company in the first quarter of 2027. EPC would sit inside that segment, so Flex is buying the business into a unit it plans to separate within months, which shapes how to read the acquisition's purpose.