Access to power has emerged as one of the greatest bottlenecks for the AI build-out, with a particular focus on natural gas, which is cheap and abundant in the US.
Anthropic’s S-1 filing proves natural gas is “an AI vertical,” Melius Research managing director James West said.
“We know power is a constraint to AI and Anthropic’s S-1 filing did nothing to assuage that view,” West wrote to clients on Tuesday. “AI compute is a natural gas demand story.”
Power-intensive data centers are the backbone of the AI build-out. US electricity demand from data centers is expected to double from 2025 to 2027, per research from Goldman Sachs, after 20 years of roughly stagnant energy grid expansion in the US.
To solve that bottleneck, data center developers have increasingly turned to “behind the meter” power, where a data center develops its own electricity-generation infrastructure or buys capacity from an existing energy provider. Parts crucial to that work, such as natural gas turbines made by GE Vernova (GEV), are now subject to years-long backlogs as developers look for power.
Anthropic acknowledges as much in its S-1 filing. In a lengthy section of the frontier lab’s risk disclosure, Anthropic said that as data center operators increasingly turn toward natural gas-fired generation — and as regulation slows some of those efforts — “we expect increased competition among users for the same natural gas supply and pipeline capacity in those areas.”
That competition, the company wrote, “may adversely affect our ability to contract for firm fuel supply and transportation and to secure the pipeline connections and laterals [to] our facilities,” not to mention electricity cost increases driven by a steep supply-and-demand imbalance.
Equipment such as transformers, turbines, generators, substations, and power transmission equipment, Anthropic disclosed, “have been subject to extended delivery timelines, price increases, tariffs and national security requirements, and allocation constraints as demand from data center operators and other large electricity consumers has grown.”
Perhaps most crucially, Anthropic wrote, “We may be unable to secure firm gas supply and transportation during the development of a facility, causing a planned site to be delayed or abandoned.”
This issue — the possibility that a planned facility may not come to fruition because the developer can’t get electricity — was brought into focus by a novel force majeure declaration from data center hyperscaler Oracle (ORCL), which was denied a natural gas pipeline permit needed to power its Project Jupiter data center site in New Mexico.
