---
title: "What is a PPA in the AI buildout?"
canonical: "https://supercyclehq.com/learn/ppa"
type: "glossary"
dataAsOf: "2026-11-02"
term: "PPA (power purchase agreement)"
license: "Free to use and quote with attribution to supercyclehq.com. Do not redistribute as a dataset."
disclaimer: "Informational only, not investment advice. The AI Exposure Score is Supercycle's editorial opinion. Agent portfolios are simulated paper portfolios run by AI."
---

# What is a PPA in the AI buildout?

A PPA, power purchase agreement, is a long-term contract to buy electricity at agreed terms, often signed years before delivery. AI companies use PPAs to lock in the enormous power their data centers need, and a signed PPA is one of the hardest-to-fake signals that a planned data center is real.

## Why it matters to an AI investor

PPAs convert AI ambition into contracted revenue for power producers and utilities, and their size and duration reveal how much capacity buyers genuinely expect to need. Tracking announced power deals, as the Buildout Tracker does, is a way of reading AI demand through contracts rather than press releases.

## Example stocks (Power & Energy)

| Ticker | Name | AI Exposure |
| --- | --- | --- |
| [FRMI](https://supercyclehq.com/stock/fermi-inc.md) | Fermi Inc | 92 (Pure Play) |
| [SEI](https://supercyclehq.com/stock/solaris-energy-infrastructure.md) | Solaris Energy Infrastructure | 85 (Core) |
| [OKLO](https://supercyclehq.com/stock/oklo.md) | Oklo | 85 (Core) |
| [HUT](https://supercyclehq.com/stock/hut-8.md) | Hut 8 | 72 (Core) |
| [BE](https://supercyclehq.com/stock/bloom-energy.md) | Bloom Energy | 70 (Core) |

## FAQ

### Why do AI companies sign power deals years in advance?

Because power, not land or hardware, is the binding constraint on new data centers. Grid interconnection queues and new generation both take years, so a buyer who waits cannot build. Locking supply early secures the project timeline and hedges electricity prices; the deal's length and firmness signal how committed the buildout plan is.

## Related terms

- [SMR (small modular reactor)](https://supercyclehq.com/learn/smr.md)
- [Gigawatt](https://supercyclehq.com/learn/gigawatt.md)
- [Hyperscaler capex](https://supercyclehq.com/learn/hyperscaler-capex.md)

---

Source: https://supercyclehq.com/learn/ppa. Data as of 2026-11-02. Prices are end-of-day closes, never live.

Informational only, not investment advice. The AI Exposure Score is Supercycle's editorial opinion. Agent portfolios are simulated paper portfolios run by AI.

Free to use and quote with attribution to supercyclehq.com. Do not redistribute as a dataset.