The tech industry has long been susceptible to the fear of missing out (FOMO), driving investment surges from the dot-com era through Web 2.0, virtual reality, and blockchain. Each wave has seen companies scrambling to capitalize on emerging trends.
Currently, the artificial intelligence (AI) boom represents the pinnacle of this phenomenon. Initially, this led to an intense competition for data center power, which has now escalated into a frantic acquisition of natural gas supplies and associated equipment. The rapid proliferation of these demands suggests the AI bubble is generating repercussions akin to multiple generations of FOMO.
Recent major announcements underscore this trend. Microsoft, for instance, revealed on Tuesday its collaboration with Chevron and Engine No. 1 to develop a natural gas power plant in West Texas, projected to reach 5 gigawatts of electricity generation. This week, Google confirmed its partnership with Crusoe for a 933 MW natural gas power plant in North Texas. Last week, Meta announced the addition of seven more natural gas power plants to its Hyperion data center in Louisiana, boosting its capacity to 7.46 GW—an output sufficient to power the entire state of South Dakota.
Are any other tech giants joining this energy race?
These substantial investments are predominantly concentrated in the southern U.S., a region abundant in some of the world's largest natural gas reserves. The U.S. Geological Survey recently estimated that a single region holds enough gas to meet the entire nation's energy needs for ten months. This vast resource has evidently become a prime target for every data center operator.
However, this intense demand for natural gas has triggered a significant shortage of power plant turbines. Wood Mackenzie projects that turbine prices are likely to surge by 195% by the close of this year compared to 2019 levels. Given that equipment constitutes 20% to 30% of a power plant's total cost, this is a critical issue. The consultancy further notes that new orders cannot be placed until 2028, and current turbine deliveries are subject to a six-year lead time.
This aggressive pursuit signals that tech companies are making a profound bet: that the AI surge will persist, requiring exponentially increasing amounts of power, and that natural gas generation will be indispensable for success in the AI era.
They may ultimately find cause to reconsider that third assumption.
While U.S. natural gas supplies are considerable, and the high cost of shipping the fuel helps insulate the country from Middle Eastern geopolitical instability, these resources are not limitless. Furthermore, production growth in the three major regions, which account for three-quarters of all U.S. shale gas, has recently experienced a notable slowdown.
The degree to which tech companies are shielded from potential price fluctuations remains unclear, as none have publicly disclosed the specific terms of their natural gas agreements. The firmness of the pricing stipulated in these contracts will be a crucial determinant.
Even if these contracted prices are as robust as possible, the companies could still face broader repercussions.
Given that natural gas accounts for approximately 40% of U.S. electricity generation, according to the Energy Information Administration, electricity prices are intrinsically linked to natural gas costs. Tech companies might initially mitigate public scrutiny by operating their gas power plants "behind the meter"—bypassing the public grid to connect directly to their data centers. Yet, natural gas is a finite resource, and if their energy demands grow too large, even these behind-the-meter operations could contribute to an overall increase in power prices for all consumers, a scenario previously observed.
Beyond households, other industries could also express discontent. Sectors heavily reliant on natural gas, and currently lacking viable renewable alternatives, might object to data centers monopolizing such a significant portion of this resource. While powering a data center with wind, solar, and battery storage is increasingly feasible, operating a petrochemical plant presents far greater challenges for such transitions.
Furthermore, weather events pose a substantial risk. A severe winter, for example, could dramatically increase household demand for heating. Wellheads could freeze, severely constricting supplies, as occurred in Texas in 2021. In such scenarios of gas scarcity, suppliers would face a difficult choice: prioritize keeping AI data centers operational or ensuring homes are heated?
By securing natural gas supplies and implementing behind-the-meter operations, tech companies can assert that they are "generating their own power" and not burdening the existing electrical grid. However, this effectively shifts their consumption from one utility network to another—the natural gas grid. The AI expansion starkly highlights the persistent physical constraints of the digital world. The prudence of making such substantial bets on a finite resource is questionable, and tech companies may ultimately regret succumbing to this particular wave of FOMO.
The Editorial Staff at AIChief is a team of professional content writers with extensive experience in AI and marketing. Founded in 2025, AIChief has quickly grown into the largest free AI resource hub in the industry.