Gray Oak Power Launches to Solve AI's Deepening Energy Crisis

HOUSTON, TX – January 15, 2026 – A new energy infrastructure company, Gray Oak Power, launched today with a mission to tackle the most significant bottleneck threatening the growth of the digital age: a critical shortage of power. Backed by global infrastructure investment firm Denham Capital, the Houston-based company will develop and operate customized, on-site power plants for data centers, aiming to circumvent multi-year delays for grid connection and accelerate the deployment of facilities crucial for the AI revolution.

The launch comes as the data center industry grapples with an unprecedented energy demand that is far outstripping the capacity of the nation's electrical grid. Gray Oak Power enters the market with what it describes as an "immediately actionable pipeline" of projects, promising to bring facilities online years ahead of traditional utility timelines.

The AI Power Crunch: A Grid at its Breaking Point

The insatiable appetite of artificial intelligence and large-scale computing has created an energy demand shockwave across the United States. According to S&P Global, US data center power consumption is projected to nearly triple by 2030, surging from an estimated 61.8 gigawatts (GW) in 2025 to a staggering 134.4 GW. This explosion in demand, after two decades of relatively flat national electricity usage, has pushed utility grids and interconnection processes to their limits.

For data center developers, this translates into crippling delays. The queue to connect to the grid has become a significant hurdle, with wait times doubling in recent years. Industry reports and utility statements indicate that developers in key markets like Northern Virginia, Silicon Valley, and Phoenix face waits of anywhere from four to ten years, and in some cases even longer, just for the necessary substation upgrades and transmission lines to be built.

This mismatch in timelines—where a data center can be constructed in 18 to 24 months but must wait five or more years for power—has created a growing number of "completed but idle" facilities. These stranded assets represent billions in stalled investment and pose a direct threat to the expansion of AI infrastructure.

"Developers are securing land faster than utilities can deliver power," said Emilio Vicens, CEO of Gray Oak Power, in the company's launch announcement. "Gray Oak Power enables projects to move forward by providing firm, on-site generation that matches the pace, scale and reliability demands of modern data centers, including high-density AI workloads."

A New Model: On-Site Generation as a Bridge to the Grid

Gray Oak Power's strategy is to build dedicated power infrastructure directly at data center sites. The company offers an integrated solution, managing everything from power plant design, permitting, and financing to construction oversight, fuel procurement, and long-term operations. By providing this on-site "firm power," Gray Oak claims it can accelerate a data center's operational launch by five or more years.

Crucially, the model is designed as a bridge, not a permanent replacement for the grid. The on-site facilities will initially serve as the primary, baseload power source, allowing the data center to become operational and generate revenue. Once the long-awaited utility connection is finally established, these same power plants will transition to a new role, providing long-term resiliency and backup power. This dual-use approach preserves the asset's value and ensures operational continuity against future grid instability.

The company is led by a team of industry veterans with a collective track record of developing and operating 9.8 GW of power generation projects worldwide. Their expertise spans both conventional gas-fired generation and renewables, allowing for site-specific solutions that balance speed, cost, and sustainability objectives.

The Force Behind the Venture: Denham Capital's Strategic Play

The entry of Gray Oak Power is underscored by the significant backing of Denham Capital, a global investment firm with over $12 billion in raised capital and deep roots in the energy sector. For over two decades, Denham has been a major player in power generation, having developed, built, or operated more than 10 GW of power assets globally, split evenly between conventional and renewable sources.

Denham's involvement signals a strategic pivot by seasoned energy investors towards the critical intersection of digital infrastructure and power generation. The firm is not a typical tech venture capitalist but an infrastructure specialist that understands the complexities of building and operating large-scale energy projects. This backing provides Gray Oak Power with both the capital and the execution credibility needed to tackle such ambitious projects.

"The data center industry's power constraints align directly with the large-scale, power solutions expertise Gray Oak Power has developed over the past three decades," stated Justin DeAngelis, Partner at Denham Capital and Global Head of the firm's infrastructure team. "By pairing Gray Oak Power's technical execution capabilities with Denham's development experience and capital, we can offer data center developers a practical path forward when grid power is not available on commercial timelines."

This move is consistent with Denham's broader strategy, which includes a separate partnership to convert retired or retiring coal-fired power plants to run on natural gas specifically to serve data center demand. The launch of Gray Oak Power appears to be another pillar in a comprehensive plan to capitalize on the data center energy crisis.

Navigating a Complex and Shifting Landscape

Gray Oak Power is entering a market that is rapidly evolving as the entire industry seeks solutions to the power dilemma. The move towards on-site generation is a growing trend, with data center operators exploring everything from microgrids and advanced fuel cells to large-scale solar and, in the longer term, small modular nuclear reactors. Research indicates that nearly 40% of data center facilities are expected to utilize some form of on-site generation for primary power by 2030, a dramatic increase from just a few years ago.

This shift, however, is not without its complexities. The reliance on natural gas-fired turbines, while a fast and reliable solution, raises environmental questions and could complicate the net-zero commitments made by many large technology companies. The industry is in a difficult position, forced to balance immediate operational needs with long-term sustainability goals.

The solution offered by firms like Gray Oak Power represents a pragmatic compromise, providing the speed and reliability necessary to fuel the AI boom while designing the assets for long-term integration with the grid. As this trend accelerates, it signals a fundamental change in the relationship between the world's largest energy consumers and the traditional utility model, potentially paving the way for a more decentralized, resilient, and hybrid energy future for digital infrastructure.