The artificial intelligence boom continues to intensify, with the competition around computing power extending further up the supply chain. As large-scale data centers accelerate their construction, the gas turbine, a traditional piece of equipment, is encountering new growth opportunities.
AI Boom Fuels Data Center Expansion
With the AI fervor showing no signs of cooling, the pace of building massive data centers has quickened. This demand is now spilling over into a previously less prominent sector: gas turbines.
Multiple hyperscale cloud providers, including Amazon, Google, Meta, Oracle, and SpaceX, are rapidly constructing AI data centers to supply the computational power needed to run AI models from companies like Anthropic and OpenAI.
However, a growing number of these tech firms are discovering that local power grids cannot keep pace with their escalating energy demands. Consequently, some are turning to building their own gas-fired power plants, with gas turbines serving as the core component.
Just weeks ago, Microsoft placed an order with energy giant GE Vernova for seven large gas turbines to power its data centers in Texas.
A massive machine, approximately 9.4 meters long, illustrates the basic principle: natural gas combusts within the unit, generating powerful force to spin blades at high speed. This mechanical energy is then converted into electricity by a generator, providing a continuous power supply for large data centers.
Despite a price tag exceeding $250 million for a single unit, demand for these complex machines continues to far outstrip supply.
Pablo Koziner, Chief Commercial and Operating Officer at GE Vernova, noted that roughly 20% of the orders for their gas power business now come from data center and AI-related projects. The company's order backlog currently extends into 2030 and even 2031.
Research Firm Notes Sharp Price Increases
According to estimates from US investment research firm Melius Research, the price of gas turbines has surged by approximately 300% over the past three years. The share price of GE Vernova has climbed more than 70% in the last six months, and its industry competitors, such as Caterpillar and Siemens, have also experienced significant growth.
Environmental Debate Surrounds Gas Turbine Power
Simultaneously, environmental concerns regarding data center construction and the use of gas turbines for power generation have emerged. In response, GE Vernova stated that the company is continuously working to improve the efficiency of its gas turbines. Their latest products are now twice as efficient as those from two decades ago, capable of generating more power while consuming less fuel.
Nevertheless, several experts argue that gas turbines alone cannot meet the total energy demands of the AI era. They suggest that future data centers will require a mix of energy solutions. From a broader perspective, constructing a more stable and efficient energy infrastructure will be a critical challenge for the continued development of the AI industry.
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