Cheniere’s profits are surging as global demand for liquefied natural gas (LNG) rises, reflecting the broader trend of increasing electricity demand driven by the AI industry’s rapid expansion. This demand underscores the strain on energy infrastructure, with few gas turbines available to keep up. Natural gas, once branded as a bridge fuel, now faces scrutiny from activists as Big Tech’s AI ambitions propel electricity requirements skyward.
Major gas turbine manufacturers like Siemens Energy, GE Vernova, and Mitsubishi are ramping up production to meet the surging demand. Siemens Energy reported a record backlog of 102 turbines, driven largely by orders from the U.S. and Europe. GE Vernova is investing $600 million to expand its turbine capacity to meet increasing needs, while Mitsubishi is doubling its production efforts.
Despite these expansions, delivery times for new turbines remain lengthy, prompting some energy consumers to convert aircraft jet engines for power generation. This quick conversion process, highlighted by a 42% rise in FTAI Aviation shares, offers a temporary solution. However, this small-scale generation can only supplement, not replace, the need for large turbines.
The situation poses a challenge for AI companies reliant on stable electricity supplies. As tech firms explore alternatives like coal or solar, they risk altering energy strategies and slowing AI growth if energy constraints persist.