Anthropic Buys $3.4B of Natural Gas Turbines to Secure Power
Anthropic is spending $3.4 billion on Caterpillar natural gas generators capable of producing up to 1.7 gigawatts, marking a major shift for a company that has historically rented compute rather than owning physical infrastructure. With turbine backlogs stretching into the early 2030s and grid interconnection queues long, the purchase secures power supply but exposes Anthropic to the risk of electricity prices tripling later this decade.
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AI’s power crunch has become so acute that Anthropic, a company that has generally avoided buying physical infrastructure, is spending $3.4 billion on natural gas turbines.
The AI company, which is planning to go public this year, is buying Caterpillar generators that equipment supplier OnePWR had originally ordered, according to a Financial Times report. The generators are capable of producing up to 1.7 gigawatts of electricity.
Historically, Anthropic has preferred to rent rather than buy. The company disclosed in its S-1 filing in May that it is paying SpaceX subsidiary xAI $1.25 billion per month through May 2029 to use xAI’s computing power.
“We expect to enter into additional similar services contracts,” Anthropic stated in the filing, meaning more deals to rent computing power.
But as demand for compute ramps up, the market for power has also grown increasingly uncertain, which may have forced its hand. The backlog for natural gas turbines stretches into the early 2030s, and queues to connect to the electrical grid can be just as long.
Anthropic’s purchase looks like a last resort.
According to the report, OnePWR ordered the turbines a couple years ago, but couldn’t find financing to complete the purchase. Anthropic had planned to buy them from OnePWR but instead went directly to Caterpillar, the manufacturer.
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AI companies have been ramping up their purchases of natural gas equipment and supplies in recent years. Google, Amazon, Microsoft, and Meta have all announced plans to build massive natural gas power plants to power their data centers on site, rather than drawing from the public grid.
The binge has given a second wind to fracking, the drilling method used to extract natural gas from underground rock. And if the buildout proceeds as planned, U.S. data centers alone could consume more natural gas than Germany and Japan combined by 2035. The reliance on natural gas also exposes hyperscalers to price fluctuations. One analyst expects that prices could more than triple by the end of the decade in some markets. If that happens, Anthropic might have a serious case of buyer’s remorse.