Anthropic reportedly buys $3.4bn of gas generators for its data centers

Anthropic has agreed to pay $3.4 billion for gas-fired generators to power its AI data centers, the Financial Times reported on Sunday, citing one person familiar with the deal. According to the FT's account, relayed by The Next Web, the agreement covers 1.7 gigawatts (GW) of large generators and was signed in late September; Tom's Hardware, citing Reuters, also dates it to late September. The FT called it the biggest known single purchase of power equipment by an AI company.

Anthropic and the supplier, OnePWR Solutions, declined to comment to the FT, and The Next Web says it has not independently confirmed the deal.

How does the deal work?

OnePWR, a power supplier based in San Antonio, Texas, placed the generator orders with Caterpillar roughly two years ago but needed additional financing to finish the purchase, the FT reported. Anthropic originally intended to buy electricity from OnePWR but ended up taking over the orders, along with the installation work. It did not acquire OnePWR, and none of the supplier's staff joined Anthropic. Where the generators will go is not known, according to The Next Web.

By inheriting orders already in Caterpillar's queue, Tom's Hardware explains, Anthropic avoids waiting for a new large order to be scheduled.

Why are AI companies buying their own power?

Demand for large gas turbines and generators, particularly from AI companies, is running ahead of supply, Tom's Hardware reports. It cites reported global turbine orders above 100 GW against an estimated 60 to 70 GW of manufacturing capacity, with average U.S. delivery times of six years and some prospective orders stretching into 2030 or 2031.

Others have taken similar routes. Tom's Hardware says xAI is using eight converted General Electric jet turbines at a Mississippi data center, each able to produce up to 50 MW for a possible 400 MW in total, and that the Southern Environmental Law Center has challenged the site's emissions permits. The Next Web adds that xAI is being sued over the gas turbines at its Memphis location. For OpenAI's first Stargate data center in Abilene, Texas, the developer Crusoe acquired 29 GE Vernova gas turbines rated at 34 MW each, up to 986 MW in total, according to Tom's Hardware.

What does Anthropic's IPO filing say about gas?

The reported purchase comes as Anthropic's own IPO filing discusses the risks of gas power. In an October 28 newsletter story on onsite gas power, Latitude Media said behind-the-meter gas plants are vulnerable to "fuel price shocks and pipeline constraints," risks that Anthropic detailed in its filing. Latitude reported that Anthropic, after years of renting computing capacity from cloud providers, is moving to build data centers of its own, backed by a $50 billion investment across Texas and New York, and that it is now in competition for firm gas capacity and transported fuel, which Latitude describes as expected to push prices higher.

Latitude notes that the filing only briefly mentions clean energy such as solar, wind, batteries, nuclear and geothermal, saying it "may not be available in the quantities or on the timelines we require, or may be available only at higher cost." Latitude also cites a Cleanview estimate that 110 GW of onsite gas projects are under way, up from 20 GW last summer. The Next Web reports that Anthropic's amended IPO filing last week listed $895bn in commitments, nearly all of it for computing power and infrastructure.

What are the concerns?

Gas-fired power draws environmental criticism. Tom's Hardware quotes Shakeel Hashim, founder of ReadTransformer, who called Anthropic's purchase "pretty grim" and wrote that "these kinds of generators are terrible for the environment." The outlet notes that getting power quickly does not remove the environmental cost of generating it.

Onsite gas plants have also had reliability problems, Latitude reports. Turbines cracked at small U.K. projects and at xAI's Colossus campus in Memphis, according to Bloomberg; the Crusoe-built Stargate site in Abilene has had trouble with its backup gas turbines and cooling equipment, according to The Information; and a Vantage data center in Virginia suffered a "critical power failure" at its onsite gas turbine plant, where locals complained about noise and air pollution. Sheldon Kimber, chief executive of the power developer Intersect, which Google acquired, told Latitude that the pipeline of such projects is crowded "largely with trash."

Disclosure: NextFish's AI drafting desk uses Claude, a model made by Anthropic, the company this story covers. Every claim above is attributed to the cited reporting.