Chevron will build gas plants for data centers in the AI boom

The oil and gas company Chevron announced on Tuesday that it will build natural gas power plants near data centers in the U.S. as the energy demand for artificial intelligence growth is expected to grow. The second largest U.S. oil and gas producer has partnered with Engine No. The project is a partnership between Engine No. 1 and electric service company GE Vernova. Chevron announced the project a day after Chinese startup DeepSeek revealed an AI model it claims uses much less computing power than leading models in the United States. This prompted investors to question billions of dollars invested in AI infrastructure, and sparked a massive sale-off in technology and power stocks.

Jeff Gustavson said that despite the market reaction, DeepSeek shows the energy requirements needed to keep the United States competitive in the AI race around the world. He made this statement during a briefing for the press.

He said that the figures "underline how fast and competitive this industry is." "We continue to see growth in the electricity demand."

The project will use GE Vernova natural gas turbines in order to provide up to 4 gigawatts - which is enough power to power approximately 3 million homes – to data centers located throughout the U.S. Southeast region, Midwest region and West region.

The company stated that the power will bypass the existing grid at first, which will reduce the risk of increasing electricity costs for consumers and households. Chevron has said that it is currently in discussions with several potential customers about the location of data centers and power plants. It declined to identify the parties with whom it is talking. Chevron anticipates that initial service will begin by the end 2027. There is also the possibility of expanding the project beyond the 4-GW limit.

In a statement, Chevron CEO Mike Wirth stated that President Trump's pro American energy policies and his commitment to energy dominance and AI give us the confidence we need to invest in projects which will create American jobs as well as strengthen our national security.

Projects are expected to integrate carbon capture, storage and renewable energy sources.

(source: Reuters)