Gluttonous artificial intelligence and its demanding data centers are reformulating decarbonization plans. When the world had embarked on a journey towards renewables, with countries like China and Europeans betting heavily, and even some US states jumping on the train, data centers arrived with needs that were almost impossible to satisfy.
At the end of December 2024, we already noted that data center consumption had skyrocketed, pushing large technology companies to rely on both renewable sources and immediate access to energy, such as gas and even coal. Some were even considering nuclear power to meet their operational demands.
Shortly after, in January 2025, a Reuters report highlighted that European energy companies, which had previously committed to renewables, were doubling down on oil and gas investments. Giants like BP and Shell slowed down their clean energy investments to revisit fossil fuel projects. However, it’s not merely about sourcing energy but also who provides the infrastructure.
That, rather than oil or gas, might represent the next energy mine.
The New Oil Mine
An article from the Financial Times suggests that the rapid growth of data centers is creating a market that energy companies are eager to seize. As demand for traditional drilling shows signs of weakening, energy sector groups like Baker Hughes, Halliburton, and SLB are capitalizing on the opportunity to pivot into the data center sector.
They’re not just building data centers or supplying energy; they’re supporting logistics as well. Leveraging their expertise in the energy sector, these companies provide equipment such as turbines and power generation systems to data center operators. They also offer generators, batteries, dissipation systems, and all necessary components to maintain energy efficiency.
These firms will oversee the entire operation, applying their existing knowledge to a burgeoning sector like data centers.
These examples illustrate that these companies are not typical oil firms but tech providers supporting those who extract gas and oil. Their expertise not only extends to oil fields but also includes technology like gas turbines, compressors, and LNG systems, reflecting their roles in new energy sectors, including carbon capture and storage systems.
This scenario echoes the ambition of ‘Big Tech’ as they built massive data centers, ultimately realizing that their increasingly demanding equipment necessitated immediate and stable energy sources.
Data Centers: The New El Dorado
It is projected that US electricity demand will surge by 90 GW by 2030 to power data centers. This explosive growth might exceed the capacity of traditional electrical networks, highlighting the pivotal role of companies providing energy services.
Lorenzo Simonelli, CEO of Baker Hughes, emphasized that pivoting towards artificial intelligence infrastructure is “key to the evolution of oil and gas.” This sentiment aligns with recent data showing a 7% year-over-year contraction in US oil rigs, decreasing margins, and reduced demand for drilling services, as noted in the Financial Times.
From a business perspective, companies transitioning to focus on data centers are positioning themselves advantageously. When the next oil crisis hits, those companies able to pivot from being energy service providers to becoming essential partners for ‘Big Tech’ will not need to alter their strategies, as they will already be entrenched in lucrative markets.
The pressing question now is whether this new MW gold rush for AI will be a sustainable business model or simply a fleeting trend.
Image | Freepik and Harpagornis
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