The AI power shortage has become so acute that Anthropic, a company that has typically avoided buying physical infrastructure, is spending $3.4 billion on natural gas turbines.
The AI company, which plans to go public this year, is buying Caterpillar generators that were originally ordered by equipment supplier OnePWR, the Financial Times reported. The generator can generate up to 1.7 gigawatts of power.
Historically, Anthropic has preferred to rent rather than buy. The company disclosed in an S-1 filing in May that it is paying SpaceX subsidiary xAI $1.25 billion a month through May 2029 to use xAI’s computing power.
“We expect to enter into additional similar service agreements,” Anthropic said in the filing, which means more agreements to rent computing power.
However, as demand for computing has increased, so has the uncertainty in the power market, which may have forced the company to respond. The backlog for natural gas turbines could extend into the early 2030s, and the queues to connect to the power grid could be similarly long.
Acquiring Anthropic appears to be a last resort.
According to the report, OnePWR ordered the turbines several years ago but was unable to find the funds to complete the purchase. Anthropic had planned to purchase them from OnePWR, but instead purchased them directly from the manufacturer, Caterpillar.
It is unclear why OnePWR was unable to secure financing despite Anthropic’s apparent interest as a customer. In any case, Anthropic probably wanted to keep the generation capacity in-house rather than give competitors the opportunity to acquire it.
AI companies have ramped up their purchases of natural gas equipment and supplies in recent years. Google, Amazon, Microsoft, and Meta have all announced plans to build large natural gas power plants to power their data centers, rather than drawing power from the public grid.
This glut gave a second wind to fracking, a drilling method used to extract natural gas from underground rocks. And if construction goes as planned, by 2035 U.S. data centers alone could consume more natural gas than Germany and Japan combined. Reliance on natural gas also leaves hyperscalers exposed to price fluctuations. One analyst predicts that prices in some markets could more than triple by the end of 2020. If that happens, Anthropic could cause serious buyer remorse.
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