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NextEra Energy’s massive $67 billion deal to acquire Virginia-based Dominion, announced on May 18, will effectively build the world’s largest utility in a bid to dominate the AI data center boom. It’s a goal big enough that NextEra was willing to pay a hefty premium—and risk overpaying—to make it happen.

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On a call with analysts, NextEra chairman and CEO John Ketchum said the acquisition was necessary to create a player big enough to satisfy enormous and fast-growing demand for electricity. He emphasized the combined scale needed to build power projects more quickly and affordably to accommodate hyperscalers, increased electrification, population growth, and more.

The two companies’ combined construction backlog of 130 gigawatts exceeds their existing power generation, Ketchum said. That represents enough electricity to power 100 million homes—out of roughly 150 million in the entire U.S.

“Our country is at an inflection point. The demand for electricity is increasing unlike anything we’ve seen in generations,” Ketchum said on a call with analysts. “Today, energy infrastructure projects are larger and more complex than ever before. Practically every corner of America needs power solutions, not someday, but right now.”

In an interview with Fortune earlier this spring, Ketchum foreshadowed these concerns and goals. He touted his desire to grow NextEra to become the industry leader in building massive data center and AI factory hubs nationwide. Attaining that scale, Ketchum said then, is the only way to grow affordably and avoid the AI affordability backlash sweeping across the country.

The biggest energy deal in decades

The all-stock deal is the largest energy acquisition this century—indeed, the largest since Exxon acquired Mobil in 1998—and would make NextEra the third-biggest U.S. energy company by enterprise value at $420 billion, behind only Exxon Mobil and Chevron.

The acquisitions represents a big 23% premium on Dominion’s $54.3 billion market cap as of market close on May 15. Dominion’s value has steadily risen since late 2023. NextEra already led the U.S. power and utility industry by market cap. But NextEra’s stock fell by almost 5% on May 18 on the deal news—while Dominion’s stock rose 9%—amid concerns of that NextEra is paying too much for Dominion at a time when utility stocks are already inflated by the AI boom.

Ketchum is betting the risk pays off. The combined company will be the biggest utility in the world, the largest renewable energy and battery storage developer in the world, the U.S. leader in total power generation and gas-fired generation, and second nationally in nuclear power. The deal merges NextEra’s massive Florida Power & Light utility and its power generation in 44 U.S. states with Dominion’s large regulated utility presence in Virginia—home to the nation’s biggest “data center alley”—and in the growing Carolinas.

“We are the only ones out there really building across the United States,” Ketchum said. “We are a builder at our heart.”

Growth and affordability

Ketchum told Fortune last month that power and utility players can only win the AI game if they have the scale and nationwide footprint to develop data center hubs in cooperation with communities—and without raising customers’ utility bills.

“We see a lot of pushback in certain parts of the country on, ‘Don’t locate data centers in my backyard,’” Ketchum said. “But once you’ve already planted our flag in one area, it’s a lot easier to expand there with local politics, water resources, and the things you have to go through.”

There are two keys to success, he said: requiring hyperscalers to pay for their own generation (“build your own power”); and having the scale and capital to grow rapidly with the data center developers.

“We can grow while they grow,” Ketchum said. “They like the idea of having a power provider that can grow along with them.”

A data center campus might require 1 gigawatt of power, he said, already enough to power three-quarters of a million homes, but some plan to expand to 5 gigawatts or more. The growing company has the expertise to offer every solution, starting with solar and battery storage power to get a data center online, then adding gas-fired power as it expands, and eventually nuclear power as well.

NextEra developed a massive fleet of gas-fired power plants in Florida. And over the past 20 years, it became an industry leader in renewable energy construction nationwide at a time when U.S. power demand was relatively flat.

“Customers had incremental demand. They didn’t need a gas plant, but they could have a 100-megawatt wind farm or solar facility, or 40 megawatts of batteries,” Ketchum said. “It was just enough to get them to accommodate the increased demand they were seeing. We were able to build up and scale around renewables and storage, which transformed our business outside of Florida.”

NextEra’s Cereal City Solar project in Michigan. Jim West/UCG/Univers