Big Oil Seeks to Power Big Tech's AI Boom

Chevron and Exxon Mobil are considering expanding into the electricity business, aiming to leverage natural gas and carbon capture technology to meet the burgeoning power needs of the tech industry's AI data centers, reports Reuters.

Chevron has been engaged in discussions for over a year regarding the supply of natural gas-fired power coupled with carbon capture technologies to data centers, said Jeff Gustavson, president of Chevron New Energies, in an interview at the Reuters NEXT conference in New York.

Gustavson's comments echo a similar announcement made by Exxon Mobil on Wednesday, outlining their strategy to provide data centers with low-carbon electricity by combining carbon capture with natural gas-fired power plants by the end of the decade.

"We are working on this as well," Gustavson stated, emphasizing Chevron's strong position in the market. "It fits many of our capabilities—natural gas, construction, operations, and being able to provide customers with a low-carbon pathway on power through CCUS (carbon capture, utilization and storage), geothermal, and maybe some other technologies."

This potential shift would mark a significant expansion for the oil majors, who traditionally focus on electricity generation solely for their own operations. The move comes amidst a surge in global electricity demand, driven by the rapid advancement of technologies like generative AI.

The U.S. electricity sector is expected to witness record-breaking demand in 2025, reversing two decades of relative flatness. This pressing need for power has prompted substantial investments in new natural gas infrastructure and efforts to delay the retirement of fossil fuel power plants.

This scramble for electricity has also led some large technology companies to adjust their climate-focused pledges, previously committed to using solely renewable sources like wind and solar for their energy-intensive AI data centers.