Anthropic joins AI’s natural gas frenzy, buys $3.4B worth of turbines

Anthropic is spending $3.4 billion on Caterpillar natural gas generators capable of producing up to 1.7 gigawatts, according to a Financial Times report cited by TechCrunch. The turbines had originally been ordered by equipment supplier OnePWR, which couldn't secure financing. Anthropic went straight to Caterpillar.

This is a sharp shift. Anthropic has preferred to rent infrastructure, including an S-1 disclosure that it pays xAI $1.25 billion a month through May 2029 for compute. Buying generation hardware outright suggests that power has become scarce enough that even renters must own a piece of it. Turbine backlogs reportedly stretch into the early 2030s, and grid interconnection queues can be just as long.

We understand why Anthropic did this. If you believe demand for your models will keep climbing, and if the only way to guarantee power is to lock up turbines before someone else does, then $3.4 billion is the price of staying in the race. TechCrunch calls it a last resort, and that reading seems right to us. It's a defensive buy as much as a strategic one.

But we shouldn't pretend this is free, or clean. Natural gas is better than coal and it can be built faster than most alternatives, but it locks in fossil infrastructure for decades. TechCrunch notes the AI buildout has given fracking a second wind, and that if plans hold, U.S. data centers alone could consume more natural gas than Germany and Japan combined by 2035. That is an extraordinary number, and it should shape how we judge the industry's climate commitments.

There's also a financial risk here that gets less attention. On-site gas plants expose AI companies to fuel price swings. One analyst cited in the report expects prices could more than triple by the end of the decade in some markets. A company heading toward a public offering is taking on commodity exposure it has never had to manage before. Investors should be asking how that risk is hedged.

The broader trend worries me more than this one deal. Google, Amazon, Microsoft and Meta are all planning massive on-site gas plants to avoid relying on the public grid. Going off-grid protects the companies from interconnection delays, but it also sidesteps the public planning process that decides how a region's energy future looks. When the biggest power buyers build private generation, the costs of emissions, pipelines and local air quality still land on neighbors.

Our position: useful AI needs power, and we'd rather see it built than see progress stall. But the industry should be investing just as hard in clean firm power, efficiency and grid upgrades, and it should be transparent about emissions per unit of compute. Buying turbines is a short-term answer. It shouldn't become the long-term plan by default.

OnePWR placed the turbine order a couple of years ago but couldn't finance it. It's not clear why financing fell through despite Anthropic's interest as a customer. Anthropic said in its S-1 that it expects more contracts like the xAI compute deal, so the turbine purchase supplements rather than replaces its rental strategy.