Who doesn’t love FOMO? From dot-com to Web 2.0, virtual reality to blockchain, the technology industry has been afraid of missing out on trends.
AI bubble is the big daddy of them all. Its first offspring, the rush to shut down power to data centers, has now begun a mad dash to secure natural gas supplies and equipment. If FOMO can have babies, then AI bubbles are already having grandchildren.
Microsoft announced Tuesday that it is working with Chevron and Engine No. 1 to build a natural gas power plant in West Texas that could produce 5 gigawatts of electricity. Google confirmed this week that it is working with Crusoe to build a 933MW natural gas power plant in North Texas. And last week, Meta announced it would add seven more natural gas power plants to its Hyperion data center in Louisiana, increasing the site’s capacity to 7.46 GW, enough to power the entire state of South Dakota.
Is there anyone missing?
Recent investments have focused on the southern United States, home to some of the world’s largest natural gas deposits. The U.S. Geological Survey recently estimated that one region alone has enough energy to power the entire United States for 10 months. It seems like every data center operator wants a piece of that.
The race for natural gas has created a shortage of turbines for power plants, and prices could rise 195% by the end of this year compared to 2019 prices, Wood Mackenzie said. This equipment accounts for 20% to 30% of a power plant’s cost. Companies will not be able to place new orders until 2028, and it will take six years for turbines to be delivered, the consultancy said.
In other words, tech companies are betting that the AI craze is here to stay, that AI will continue to require exponential amounts of electricity, and that success in the AI era will require natural gas generation.
tech crunch event
San Francisco, California
|
October 13-15, 2026
They may come to regret that third assumption.
The United States remains somewhat insulated from the turmoil in the Middle East because natural gas is plentiful and the fuel is not cheap to transport. However, supply is not unlimited, and production growth has slowed significantly in recent years in the three major regions that account for three-quarters of U.S. shale gas production.
It’s not clear how insulated tech companies are from price fluctuations, as none of the companies has disclosed specific contract terms. A lot depends on how firm the prices of those contracts are.
Even if contract prices are as firm as possible, companies may still face consequences.
According to the Energy Information Administration, natural gas generates about 40% of electricity in the United States, so electricity prices are closely tied to natural gas prices. Tech companies may be able to shield themselves from scrutiny for a while by moving gas power plants behind the meter, bypassing the power grid and connecting directly to data centers. But natural gas is not an infinite resource, and if their ambitions get too big, behind-the-meter operations can also drive up electricity prices. We’ve all seen how it plays out.
It’s not just households that are in turmoil. Other industries, including those that remain highly dependent on natural gas and cannot yet turn to renewable energy, may think twice about data centers taking up so much of their resources. Powering your data center with wind, solar, or batteries is easy. Do you run a petrochemical plant? There aren’t that many.
Then there’s the weather. A cold winter could increase household demand and change the calculus. As happened in Texas in 2021, wellheads could freeze, severely tightening supply. Gas shortages will force suppliers to make choices. Keep AI data centers running or let people heat their homes?
By procuring natural gas supplies on short notice and operating behind the meter, technology companies can claim that they are “self-sufficient” and do not burden the grid. But in reality, you’re just transferring usage from one power grid to another, the natural gas grid. The AI rush reveals how physically constrained the digital world remains. Does it make sense for them to bet big on finite resources?Tech companies may regret falling into FOMO.
