The intense demand for power by artificial intelligence has reached a critical point, compelling Anthropic, a firm typically averse to acquiring physical infrastructure, to invest $3.4 billion in natural gas turbines.
This AI enterprise, slated for a public offering this year, is purchasing Caterpillar generators that were initially ordered by equipment provider OnePWR, as reported by the Financial Times. These generators possess the capacity to generate up to 1.7 gigawatts of electrical power.
In the past, Anthropic has opted for leasing over outright ownership. The company revealed in its S-1 filing last May its commitment to pay SpaceX’s subsidiary, xAI, $1.25 billion monthly until May 2029 for access to xAI’s computing capabilities.
“We anticipate entering into further analogous service agreements,” Anthropic declared in the filing, indicating an intention for more contracts to lease computing resources.
However, with the escalating demand for computing, the energy market has become increasingly unpredictable, potentially compelling Anthropic to alter its usual strategy. The waitlist for natural gas turbines extends until the early 2030s, and connection queues for the electrical grid often mirror this extensive duration.
Anthropic’s acquisition appears to be a measure of last resort.
As per the report, OnePWR placed an order for these turbines several years ago but was unable to secure the necessary financing to finalize the acquisition. Anthropic had initially intended to procure them from OnePWR but ultimately dealt directly with Caterpillar, the producer.
The precise reasons behind OnePWR’s failure to obtain financing, even with Anthropic’s clear interest as a client, remain unclear. Regardless, it’s probable that Anthropic aimed to retain control of this generating capacity, preventing a rival from acquiring it.
In recent years, AI companies have been increasing their acquisitions of natural gas equipment and provisions. Google, Amazon, Microsoft, and Meta have each declared intentions to construct substantial natural gas power facilities to energize their on-site data centers, instead of relying on the general electricity grid.
This surge in demand has invigorated fracking, the extraction technique for natural gas from subterranean rock. Should this expansion materialize as projected, U.S. data centers could, by 2035, consume a greater volume of natural gas than both Germany and Japan combined. This dependence on natural gas also subjects hyperscale companies to volatile price shifts. One expert predicts that costs might exceed triple their current value in certain markets by the decade’s end. If such a scenario unfolds, Anthropic could experience significant buyer’s regret.