GE Vernova Inc. has agreed to acquire the remaining 50% stake in transformer manufacturer Prolec GE from its joint venture partner, Mexico's Cygnus Group, for approximately $5.3 billion. This move comes as the current AI boom is driving a surge in demand for products and services within the electricity sector. Scott Strazik, CEO of GE Vernova, stated, "This aligns closely with many of our current priorities." He emphasized that fully owning Prolec would enable GE Vernova to increase investments in North America and the grid equipment sector, as well as expand services to hyperscale enterprises building data centers. "We are deepening our close ties with data centers every quarter." As the electricity consumption from data centers rises sharply to support the AI objectives of large tech companies, and with ongoing economic electrification, global electricity demand is rapidly increasing. Data suggests that data centers are expected to consume about 4.4% of the world's electricity by 2035. This substantial energy consumption would rank them fourth in power demand, after China, the U.S., and India.

GE Vernova, which was spun off from General Electric last year, has emerged as a major beneficiary of this energy wave, largely due to the strong performance of its gas turbine business. The company's stock has risen approximately 78% this year. In September, GE Vernova agreed to sell its industrial software business Proficy to alternative asset management firm TPG for $600 million, intending to reinvest the proceeds into its core operations. Prolec is a supplier of grid equipment, producing transformers across a wide range of ratings and voltage levels, with seven production bases worldwide, five of which are located in the U.S., and employs about 10,000 people. The joint venture was originally established by General Electric and Mexico's Cygnus Group in 1995. Strazik noted, "We are seeing significant growth in demand for power equipment, making this our fastest-growing business." He revealed that Cygnus was originally the controlling partner of Prolec, and this transaction will grant GE Vernova greater decision-making power in product R&D. According to company documents, the non-compete clause in the joint venture agreement previously restricted GE Vernova's ability to sell transformers in North America, but this limitation will be lifted upon completion of the transaction.