Chevron to build gas plants to power data centers amid AI boom
(Reuters) -Oil and gas producer Chevron said on Tuesday it plans to build natural gas-based power plants next to data centers in the U.S., as energy demand to support the growth of artificial intelligence is expected to boom.
The second-largest U.S. producer is partnering with investment firm Engine No. 1 and electric services company GE Vernova on the project.
Chevron's announcement comes a day after Chinese startup DeepSeek unveiled an AI model that it says uses far less computing power than industry-leading models in the United States, prompting investors to question the billions of dollars spent on AI infrastructure and sparking a massive sell-off in tech and power stocks.
Despite the market's reaction, DeepSeek demonstrates the energy requirements that will be needed to support the United States' ability to compete in the global AI race, said Jeff Gustavson, president of Chevron New Energies, during a press briefing.
"It underscores how competitive and fast-moving this is," he said. "We still see the growth in electricity demand."
The project will use GE Vernova's natural gas turbines to deliver up to 4 gigawatts of power - enough to power roughly 3 million homes - to data centers located in the U.S. Southeast, Midwest and West regions.
The power will initially bypass the existing transmission grid, which reduces the risk of raising electricity costs for households and consumers, the company said.
Chevron said it is in conversations with multiple potential customers to determine the locations of the data centers and power plants, declining to name who it is speaking with. Chevron expects to begin initial service by the end of 2027, with the potential for project expansion beyond the 4-GW capacity.
"President Trump's pro-American energy policies and commitment to energy and AI dominance give us the confidence to invest in projects that will create American jobs and strengthen our national security," Chevron CEO Mike Wirth said in a statement.
The projects are also expected to be designed to potentially integrate carbon capture and storage, and renewable energy resources.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
25 minutes ago
- Yahoo
Why EchoStar Bounced Back Today
EchoStar issued a press release touting its new 5G-enabled tablet. The FCC recently threatened EchoStar's spectrum holdings, alleging it hadn't been building its 5G network fast enough. Elon Musk's public spat with Donald Trump may also, believe it or not, account for the rise, since Musk's SpaceX wants EchoStar's spectrum. 10 stocks we like better than EchoStar › EchoStar (NASDAQ: SATS) shares were bouncing back today, up 10% as of 2 p.m. ET. EchoStar's shares have been under severe pressure since the beginning of the year, but especially in the past week. That's because management decided to not make two separate interest payments on its debt, as it awaits a decision from the FCC regarding its spectrum. Management has a 30-day grace period to do so before the company is technically in default. The spectrum debate has to do with the pace of EchoStar's 5G rollout, and is also indirectly linked up with Elon Musk's SpaceX. Back in May, the new Trump-appointed FCC director sent a letter to EchoStar, stating that the extension it was granted to complete its 5G network buildout by the prior administration was under review. EchoStar had purchased valuable spectrum years ago, on the terms that it would build a 5G network to increase competition in the industry. However, EchoStar's buildout has been slow, which is perhaps not surprising, given its declining legacy business in satellite TV. In an interesting wrinkle, Musk's SpaceX had led a campaign to win more satellite spectrum for its own services, including the spectrum held by EchoStar. That may have played a part in the FCC's initiation of a review, given Musk's ties to the Trump administration. However, late yesterday, EchoStar issued a press release introducing its new Boost Mobile Celero tablet, the Celero5G TAB, a low-cost tablet that takes advantage of EchoStar's 5G network. While normally not that significant, the announcement of a new 5G product could go a ways toward making EchoStar's case to the FCC that it deserves to keep its spectrum. Furthermore, it appears Musk's relationship with the Trump administration is now on the outs, given Musk's storm of posts today criticizing the administration and Republicans in Congress for the deficit expansion in the "Big, Beautiful Bill" making its way through Congress. If Musk and Trump have a falling out, then the FCC may not aggressively pursue EchoStar's spectrum on behalf of SpaceX, if SpaceX's campaign was in fact a motivating factor in initiating the review. EchoStar's stock has been punished severely, so it could make for a turnaround play if in fact it's able to deploy 5G to more areas and grow its low-cost Boost Mobile offerings. However, its high debt, declining legacy satellite TV business, and unresolved battle with the FCC remain big risks. Betting on a big recovery is a highly risky proposition, and only appropriate for speculators at this point. Before you buy stock in EchoStar, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and EchoStar wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why EchoStar Bounced Back Today was originally published by The Motley Fool
Business Insider
29 minutes ago
- Business Insider
Trump signs Executive Order to ‘unleash American drone dominance'
President Donald Trump signed an Executive Order to 'ensure continued American leadership in the development, commercialization, and export of unmanned aircraft systems – otherwise known as drones,' the White House announced. 'The Order directs the Administrator of the Federal Aviation Administration to expand drone operations by enabling routine 'Beyond Visual Line of Sight' drone operations for commercial and public safety missions, and to accelerate the development, testing, and scaling of American drone technologies, including advanced air mobility and autonomous operations. The Order establishes an electric 'Vertical Takeoff and Landing' integration pilot program to accelerate the deployment of safe and lawful vertical operations in the United States, selecting at least five pilot projects to advance applications like cargo transport and medical response,' the White House stated. Companies working on drones or low-altitude urban aircraft known as eVTOLs include AeroVironment (AVAV), Joby Aviation (JOBY) and Archer Aviation (ACHR). Confident Investing Starts Here:
Business Insider
29 minutes ago
- Business Insider
Ford Stock (NYSE:F) Gains with Better Access to Rare Earths
One of the biggest supply chain problems for companies like legacy automaker Ford (F) is the access to rare earth minerals of the kind commonly used in electric vehicles. But a new report says that getting those rare earths out of one of their biggest sources, China, will actually be a little easier now. That news made investors breathe a little easier themselves, and shares were up nearly 2% in Friday afternoon's trading. Confident Investing Starts Here: China has brought out a set of temporary export licenses, reports note, which will offer up access to rare earths for each of the Big Three automakers, which include General Motors (GM) and Stellantis (STLA) as well. Reports note that at least some of the licenses are valid for the next six months, which should keep the lot of them in rare earths for some time to come. But it was hard not to notice that this change came just after a recent phone call between President Trump and President Xi Jinping, suggesting that that was part of some larger deal between the two. The move to restrict the supply of rare earth minerals has left many companies scrambling to fill in the supply gaps, and left many considering China a major bottleneck in the supply chain. With China producing about 90% of the world's supply, it is clear that they have the whip hand when it comes to these elements. We're All Getting Concerned About These Recalls You have likely noticed by now that the news around here, when it comes to Ford, seems to reference 'recall' a lot lately. Granted, some of these recalls have been minor to say the least; recalls that impact a handful of cars, or that are fixed with a software update. But not all of them have been so trivial, and some are starting to wonder if Ford's quality issues are starting to flare back up again. Daniel Ives, analyst with Wedbush Securities—who has a four-and-a-half star rating on TipRanks—recently noted that Ford was in a 'code-red situation…after a disaster quarter.' Rising warranty costs connected to all these recalls were hurting Ford, much as they did last year at this time. And with more recalls seeming to crop up, that could indeed prove a problem. However, bear in mind that the recalls are not all problems, especially when software is involved. So while Ford's recall count is on the rise, many of these recalls are much more simply addressed than they once were. Is Ford Stock a Good Buy Right Now? Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 16.87% loss in its share price over the past year, the average F price target of $9.71 per share implies 5.18% downside risk.
