Activist investors are now telling Bitcoin miners what to do with their Texas power capacity. Google just bought an entire energy company so it doesn't have to wait in line for grid access. And NRG is breaking ground on a new gas plant in Houston because somebody has to actually generate the electricity all these data centers are going to need.

Three very different plays this week. All pointed at the same reality: whoever controls power in Texas controls the AI buildout. And the race to lock it down is getting aggressive.

Starboard Tells Riot Platforms: "You're Sitting on $1.6 Billion. Act Like It."

Activist investor Starboard Value went public this week with a letter to Riot Platforms, and it wasn't subtle. Starboard wants Riot to stop treating its 1.7 gigawatts of Texas power capacity like a Bitcoin mining operation and start treating it like what it actually is: one of the most valuable AI infrastructure footprints in the state.

Starboard's pitch is blunt. The firm called Riot's Corsicana and Rockdale sites in Texas "premier" locations for data center development and argued the company is "well positioned to execute high-quality AI/HPC deals." The math they laid out: converting those sites to AI hosting could generate over $1.6 billion in annual EBITDA. AI tenants pay steady, high rents with 80% to 90% profit margins. Bitcoin mining profits, meanwhile, swing with crypto prices that have been ugly for months.

Riot's stock jumped nearly 9% on the news. And Riot isn't starting from zero. In January, the company signed a 25 MW lease deal with AMD at its Rockdale facility, converting part of the cryptomine to high-performance computing. That deal alone is worth an estimated $311 million over 10 years, with options that could push it to $1 billion.

J.P. Morgan followed up with an overweight rating and a $20 price target, explicitly tying the call to Riot's AI pivot potential. Two weeks ago, I told you the miner pivot story was just getting started. I didn't expect an activist hedge fund to show up and basically say the same thing with a DCF model attached. But here we are.

Google Bought Intersect Power for $4.75 Billion. Think About What That Means.

Google's parent Alphabet is doing something none of the other hyperscalers have tried at this scale: buying an entire energy development company. The $4.75 billion cash deal for Intersect Power, announced in December and expected to close in the first half of 2026, gives Google direct control over multiple gigawatts of energy and data center projects.

The logic is straightforward. Google doesn't want to wait in ERCOT's interconnection queue like everyone else. Intersect Power founder and CEO Sheldon Kimber has been building exactly the kind of co-located energy and data center infrastructure that Google needs, including the Quantum Clean Energy Project in Haskell County, Texas: 640 MW of solar, 1.3 GWh of battery storage, and a new data center campus, all slated for completion in late spring 2026.

The numbers behind Intersect tell you how serious Google is about supply. Intersect has a 2.4 GW solar module deal with First Solar through 2026 and a 15.3 GWh Tesla Megapack agreement through 2030. By 2028, the company expects 10.8 GW of capacity online or in development. Google projected its 2026 AI infrastructure capex at between $91 billion and $93 billion. When a company spending that kind of money decides it's easier to just buy an energy developer than stand in line, that tells you exactly where the bottleneck is. It's not chips. It's not talent. It's power.

NRG Breaks Ground on $617 Million Gas Plant in Houston

While the hyperscalers chase solar, batteries, and nuclear, NRG Energy is making a very different bet: a new natural gas plant at its Greens Bayou complex in northeast Harris County. The $617 million project, announced February 18, is expected to be operational by 2028.

Governor Greg Abbott was quick to claim credit, announcing that the project qualified for a state incentive program and calling it an investment that "will add more power to Texas' energy infrastructure and help meet energy needs of Texas homes and businesses." Classic.

The timing matters. ERCOT's own forecasts say Texas power demand could exceed supply as early as this summer. The EIA recently revised its ERCOT growth rate projection from 15.7% down to 9.6% for 2026, but even the lower number is enormous. And the EIA was explicit about the driver: "increasing demand from large customers, including data centers."

Gas plants aren't sexy. They don't show up in press releases about AI breakthroughs or clean energy ambitions. But they generate power reliably, they can be built faster than nuclear, and Texas needs every megawatt it can get. Sometimes the boring play is the smart one.

Blackstone Just Got the Keys to a Texas Utility

One more deal worth flagging. On February 6, the Public Utility Commission of Texas unanimously approved Blackstone Infrastructure's $11.5 billion acquisition of TXNM Energy. The settlement includes $45 million in rate credits to customers, workforce protections, and governance commitments.

Blackstone isn't buying a utility because it loves regulated returns. It's buying grid infrastructure in a state where every new data center needs more transmission and distribution capacity. The PUCT expects consumers to pay roughly $32 billion in new utility infrastructure costs between now and 2032. That is a lot of rate base growth for the company sitting on it. Smart money, quiet move.

Meanwhile, Batteries Keep Quietly Saving the Grid

During the most recent winter storm, battery storage provided 9.5% of ERCOT grid power, more than 7,000 megawatts. Enough to power roughly 1.75 million homes. Noah Roberts, executive director of the U.S. Energy Storage Coalition, called Texas the nation's "gold standard" in implementing battery storage.

Three years ago, batteries were a rounding error on the ERCOT grid. Now they're outperforming some gas plants during peak demand events. That's not hype. That's 7,000 megawatts of proof. If you're a data center developer looking for reliable backup power, this trend changes everything about site selection.

What to Watch Next Week

Riot Platforms earnings call: Watch for specifics on the Corsicana AI conversion timeline and whether Starboard's pressure accelerates management's pivot plans.

Google/Intersect closing timeline: The deal is expected to close in H1 2026. Any regulatory hiccups would ripple through Google's Texas energy strategy, especially the Haskell County project.

ERCOT batch study results: The first batch of interconnection applications under the new rules should start producing results. This will sort the real projects from the paper ones.

Stargate Abilene construction milestones: Published reports suggest the campus is approaching 1 GW of capacity by mid-2026. Updated construction numbers should surface this month.

This newsletter is for informational purposes only and does not constitute investment advice.