The tech industry has a storied history of succumbing to the Fear Of Missing Out (FOMO), from the dot-com boom to Web 2.0, virtual reality, and blockchain. Each era has seen companies rushing to capitalize on the next big trend.
Currently, the AI revolution stands as the ultimate embodiment of this phenomenon. Its initial phase saw a scramble to secure power for burgeoning data centers, which has now escalated into a desperate pursuit of natural gas supplies and the necessary equipment. If FOMO could propagate, the AI craze is already generating its grandchildren.
Recent major announcements underscore this trend. Microsoft revealed on Tuesday its collaboration with Chevron and Engine No. 1 to develop a natural gas power plant in West Texas, projected to expand to 5 gigawatts of electricity. Google confirmed this week its partnership with Crusoe to construct 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, bringing its total capacity to 7.46 GW—sufficient to power the entire state of South Dakota.
Are other major players poised to follow suit?
These significant investments are predominantly concentrated in the southern U.S., a region renowned for some of the world's largest natural gas deposits. The U.S. Geological Survey recently estimated that one region alone holds enough gas to meet the energy needs of the entire United States for ten months. It appears every data center operator is keen to secure a share of this abundant resource.
This intense demand for natural gas has, however, created a critical shortage of turbines for power plants. Wood Mackenzie predicts that turbine prices are likely to surge by 195% by the end of this year compared to 2019 levels. Given that equipment constitutes 20% to 30% of a power plant's total cost, this is a significant factor. The consultancy also notes that new orders for turbines cannot be placed until 2028, with delivery times currently extending to six years.
Such commitments indicate that tech companies are making a substantial bet: that the AI boom is here to stay, that AI will continue to demand exponentially increasing amounts of power, and that natural gas generation will be indispensable for success in the AI era.
However, this third assumption regarding natural gas might prove to be a source of future regret.
While the U.S. boasts plentiful natural gas supplies, and the high cost of shipping the fuel provides some insulation from Middle Eastern geopolitical turbulence, these supplies are not limitless. Moreover, production growth in the three primary regions—which together account for three-quarters of all U.S. shale gas production—has recently slowed considerably.
The extent to which tech companies are shielded from price volatility remains unclear, as none have disclosed the specific terms of their agreements. A significant factor will be the firmness of the pricing clauses within these contracts.
Even with the most robust contractual price agreements, these companies could still face broader repercussions.
According to the Energy Information Administration, natural gas generates approximately 40% of U.S. electricity, making electricity prices closely intertwined with gas prices. Tech companies might initially mitigate public scrutiny by operating their gas power plants "behind the meter," connecting them directly to their data centers and bypassing the public grid. Yet, natural gas is a finite resource, and if their ambitions continue to expand unchecked, even these behind-the-meter operations could eventually drive up electricity prices for all consumers, a scenario we have witnessed before.
The discontent won't be confined to ordinary households. Other industries, particularly those heavily dependent on natural gas and unable to readily transition to renewables, may object to data centers monopolizing such a significant portion of the resource. Powering a data center with wind, solar, and batteries is relatively straightforward; running a petrochemical plant, by contrast, is not.
Furthermore, the unpredictable nature of weather presents another critical variable. A severe winter could drastically alter the energy landscape by spiking household demand. As seen in Texas in 2021, wellheads can freeze, dramatically crimping supplies. In such a scenario of gas scarcity, suppliers would face an agonizing choice: maintain power to AI data centers or ensure homes can be heated?
By acquiring natural gas supplies and moving operations "behind the meter," tech companies can assert they are "bringing their own power" and alleviating strain on the electrical grid. In reality, however, they are merely shifting their consumption from one critical infrastructure—the electricity grid—to another: the natural gas grid. The AI rush starkly illuminates how physically constrained the digital world remains. Is it truly prudent for these companies to stake so much on a finite resource? 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.