AI companies are building huge natural gas plants to power data centers. What could go wrong?
Who doesn’t love a good round of FOMO? From dot-com to Web 2.0, virtual reality to blockchain, the tech industry has had its share of being too afraid to miss out on a trend. The AI bubble is the big daddy of them all. Its first offspring — the rush to lock down power for data centers — is now beget
The Lead
AI companies are building huge natural gas plants to power data centers. What could go wrong?. Who doesn’t love a good round of FOMO? From dot-com to Web 2.0, virtual reality to blockchain, the tech industry has had its share of being too afraid to miss out on a trend. The AI bubble is the big daddy of them all. Its first offspring — the rush to lock down power for data centers — is now begetting a mad dash to secure natural gas supplies and equipment. If FOMOs could have babies, then the AI bubble is already having grandkids.
Key Details
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. This week Google confirmed that it's working with Crusoe to build a 933 MW natural gas power plant in North Texas. And last week, Meta announced that it was adding another seven natural gas power plants to its Hyperion data center in Louisiana, bringing the site to 7.46.
Context
Every data center operator seems to want a part of it. 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. Companies won’t be able to place new orders until 2028, and it’s taking six years to get turbines delivered, the.
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