Anthropic buys $3.4B in natural gas turbines to secure power

In short: Anthropic is spending $3.4 billion on natural gas turbines to lock in electricity for its AI work.

What's going on

Anthropic, the company behind the Claude chatbot, is buying natural gas turbines and generators made by Caterpillar, according to reports cited by TechCrunch. Turbines are big machines that burn natural gas to make electricity (like a very large engine that turns fuel into power). The equipment can produce up to 1.7 gigawatts, which is roughly the output of a large power plant.

This is a shift for Anthropic. The company has usually rented what it needs instead of buying physical equipment. For example, it previously disclosed it is paying a SpaceX subsidiary called xAI $1.25 billion per month through May 2029 to use computing power, meaning access to the computers that run and train AI models.

The purchase also reflects a wider pattern in the AI industry. TechCrunch notes that the backlog for new natural gas turbines stretches into the early 2030s, and it can take years to connect new facilities to the public electric grid. Other large tech firms, including Google, Amazon, Microsoft, and Meta, have announced plans to build or use on-site gas power for data centers instead of relying on the grid.

What to watch

This rush toward natural gas could have costs later. Natural gas prices can swing, and one analyst cited by TechCrunch expects prices could more than triple in some markets by the end of the decade. If fuel gets much more expensive, owning gas-powered equipment could turn from a safety net into a financial burden.

Source: TechCrunch AI