Anthropic buys 1.7 GW of gas turbines for $3.4 billion

Anthropic is buying $3.4 billion worth of gas generators from Caterpillar, capable of producing up to 1.7 GW of electricity. According to the Financial Times, the company is acquiring equipment that supplier OnePWR ordered several years ago but could not finance. Anthropic usually rents computing capacity, but amid rising demand and long waits for grid connections, it is now taking control of an energy source itself.

Anthropic buys 1.7 GW of gas turbines for $3.4 billion

Why Anthropic decided to buy generators

Anthropic plans to go public this year. Until now, the company has preferred to rent infrastructure rather than buy it. In its May S-1 filing, it said it pays SpaceX subsidiary xAI $1.25 billion a month for access to computing capacity through May 2029. Anthropic also said in the filing that it expects to sign similar agreements.

But electricity availability is becoming less predictable. The queue for gas turbine deliveries stretches into the early 2030s, and connecting to the power grid can take just as long. According to the Financial Times, Anthropic initially planned to buy the turbines from OnePWR, but then approached equipment manufacturer Caterpillar directly.

It is not known why OnePWR could not secure financing, despite Anthropic apparently being interested in the purchase. Anthropic may have decided to secure the generating capacity itself so a competitor could not take the order.

Gas infrastructure for data centers

Large technology companies are also developing their own gas power infrastructure. Google, Amazon, Microsoft and Meta have announced plans to build large gas-fired power plants near data centers, supplying them directly with electricity rather than drawing from the shared grid.

Rising demand for gas equipment has given hydraulic fracturing — a method of extracting natural gas from underground rock formations — a new boost. If the infrastructure plans go ahead, US data centers alone could consume more gas by 2035 than Germany and Japan combined.

Dependence on gas leaves major cloud providers exposed to price fluctuations. One analyst expects prices in some regions to rise more than threefold by the end of the decade. If that happens, Anthropic’s purchase could prove costly.

The article’s author is Tim De Chant, TechCrunch’s senior climate correspondent. He also teaches in MIT’s graduate program in science journalism. In 2018, De Chant received a Knight Science Journalism Fellowship at MIT, where he studied climate technology and new business models for journalism. He earned a PhD in environmental science, policy and management from the University of California, Berkeley, and a bachelor’s degree in environmental studies, English and biology from St. Olaf College.

Dataist’s take: The purchase gives Anthropic control over a major energy source amid capacity shortages and long waits for grid connections. But generating its own power does not remove the price risk: gas-fired power plants tie the company to a market where prices in some regions could more than triple by the end of the decade.