Business · TechCrunch AI
AI companies are building major natural gas plants to power data centers
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Key facts
- Microsoft said on Tuesday that it’s working with Chevron and Engine No. 1 to build a natural gas power plant in West Texas that could grow to produce 5 gigawatts of electricity
- Recently, the U.S. Geological Survey estimated that there’s enough in one region to supply energy to the entire United States for 10 months by itself
- The scramble for natural gas has led to a shortage of turbines for the power plants, with prices likely to rise 195% by the end of this year relative to 2019 prices, according to Wood Mackenzie
- The equipment contributes 20% to 30% of the cost of a power plant
Summary
The AI bubble is the big daddy of them all. Microsoft said on Tuesday that it’s working with Chevron and Engine No. 1 to build a natural gas power plant in West Texas that could grow to produce 5 gigawatts of electricity. The recent investments are concentrated in the southern U.S., home to some of the largest natural gas deposits in the world. The scramble for natural gas has led to a shortage of turbines for the power plants, with prices likely to rise 195% by the end of this year relative to 2019 prices, according to Wood Mackenzie. That means tech companies are betting that the AI fever won’t break, that AI will continue to need exponential amounts of power, and that natural gas generation will be necessary for success in the AI era.