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Anthropic IPO Filing Reveals AI Industry's Heavy Reliance on Natural Gas
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- DeepHorus
On October 27, The Verge reported that Anthropic, which is preparing to go public, disclosed in its S-1 registration statement filed with the U.S. Securities and Exchange Commission that the generative AI industry is heavily reliant on natural gas, whose main component is methane. The filing states that both electricity supply and data center sites with favorable power supply conditions are facing intense competition. This makes natural gas supply an unavoidable condition for its data center plans.
Anthropic said that data centers are increasingly dependent on natural gas, which will subject AI data center construction to fuel price increases and supply chain bottlenecks. The filing also acknowledges that rising temperatures caused by burning fossil fuels will further push up its own operating costs. Some planned data centers will need to rely on gas turbines for on-site power generation.
Anthropic rents computing resources from large cloud service providers and last year announced a $50 billion investment plan to expand data center capacity in Texas and New York. The United States has the highest concentration of data centers in the world. To meet continuously growing electricity demand, the scale of fossil fuel power generation facilities planned for construction in the United States will reach its highest level in a decade.
Insufficient supply of gas turbines is also slowing data center construction. To shorten the wait time for grid connection, some developers install gas-fired internal combustion engines to generate their own electricity. Because gas turbine manufacturers have backlogs of orders, developers have also turned to relatively simpler gas turbines, which reduces on-site power generation efficiency and increases pollution.
While data centers increase greenhouse gas emissions, Anthropic lists climate change as a business risk in its listing filing. As temperatures rise, the electricity and water costs needed to cool servers will also increase. Anthropic also expects that cloud service providers and data center operators rushing to build data centers will intensify competition for natural gas supply and gas pipeline capacity, and may drive up gas prices.
Natural gas power generation accounts for 40% of total U.S. electricity generation and is the main method of power generation in the United States. As power companies step up upgrades to energy infrastructure, the costs borne by the American public are also rising, and residents in various places have successfully blocked dozens of proposed data center projects. Anthropic acknowledges that concerns about sharp increases in electricity bills are enough to affect project progress; if a stable supply of natural gas cannot be ensured or gas pipelines are lacking, some construction plans may be delayed or canceled, thereby constraining business growth.
