Is Plug Power a Hidden AI Power Play?

The world needs a massive amount of power to support Artificial Intelligence (AI). According to an estimate by Goldman Sachs, AI will fuel a ferocious 165% increase in data center power demand by the end of the decade. That's leading companies to lock up as much electricity supply as they can get their hands on to power their AI ambitions.

Plug Power (NASDAQ: PLUG) believes it can be part of the solution. Here's a look at how the hydrogen company could capitalize on the AI power grab and what might stand in its way.

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Launching a new initiative

Plug Power is a leader in developing comprehensive solutions for the hydrogen economy. The company provides electrolyzers, liquid hydrogen, fuel cell systems, storage tanks, and fuel infrastructure to customers. It has deployed over 72,000 fuel cell systems and 275 fueling stations. It's also becoming a leader in producing hydrogen in the U.S.

The company recently unveiled a new initiative to support the build-out of U.S. data centers, crucial to supporting the adoption of AI. These power-hungry facilities need access to a massive amount of stable power, which is often difficult for the grid to provide. That's leading many data center developers to seek out additional power solutions to support these facilities.

As part of this initiative, Plug Power signed an agreement to monetize its electricity rights in New York and another location and collaborate with a U.S. data center developer. Plug will work with this company to explore providing auxiliary and back-up power solutions using its advanced fuel cell technology. The company believes that its fuel cell systems are ideally suited to provide the resilient, zero-emissions power that AI data centers require.

Plug Power isn't the only fuel cell provider to partner with a data center developer. Bloom Energy recently secured a $5 billion strategic partnership with leading alternative investment manager Brookfield Asset Management. As part of the deal, Bloom Energy could install up to 1 gigawatt (GW) of its advanced fuel cells at data centers and AI factories (purpose-built AI-data centers). The companies are collaborating to design and deploy this technology at facilities built by Brookfield.

Plug Power's biggest problem

Plug Power doesn't want to miss out on what could be a massive opportunity to deploy fuel cells at data centers. Power demand from AI data centers in the U.S. alone could top 100 GW by 2035. Fuel cells could help supply these facilities with the stable energy they need to operate.

However, Plug Power faces a significant obstacle in its pursuit of this potentially massive and lucrative market opportunity. The company has a frail financial profile.

The hydrogen company has been burning through cash to fund its operations and expansion over the years. Through the first nine months of 2025, Plug Power reported an operating loss of nearly $705 million on less than $485 million in revenue. The company burned through $90 million of cash during the third quarter alone, though, on a positive note, that was down 49% compared to the year-ago period.

Plug Power ended the period with only $160 million of cash, giving it less than two quarters of runway before running out of money at its current cash burn rate. However, the company has since bolstered its cash position by raising $370 million of capital after the quarter ended, as existing investors exercised their warrants to purchase additional shares. Additionally, Plug Power expects to generate over $275 million in capital through the monetization of its electricity rights, the release of restricted cash, and reduced maintenance expenses as part of a series of recently launched initiatives. The company also completed a $375 million convertible senior notes offering, which enabled it to repay other higher-cost debt, including some set to mature next year. This fresh capital and debt refinance provides the company with more breathing room.

Despite that progress, Plug Power's finances remain an issue. It will continue to require additional capital to fund its operations and expansion, as it's still several years away from achieving sustainable profitability. That could impact its ability to fully capitalize on the potential demand for its fuel cells from data center developers.

A risky bet

Plug Power could emerge as a key player in helping power data centers. However, it's unclear whether the company will have the financial fortitude to fully capitalize on this opportunity. Given the high risk, Plug Power isn't yet worth betting on as a potential emerging leader in AI power.

Matt DiLallo has positions in Brookfield Asset Management. The Motley Fool has positions in and recommends Brookfield Asset Management and Goldman Sachs Group. The Motley Fool has a disclosure policy.