AI Boom Sends Natural Gas Turbine Prices Soaring

The demand for natural gas power turbines is skyrocketing due to the rapid growth of AI data centers, which are being built faster than utility companies can add electricity-generating capacity. According to BloombergNEF, nearly 100 data centers with or building on-site natural gas turbine power infrastructure already exist, and this number is expected to grow.

The high demand for turbines has led to a shortage in supply, causing prices to soar. Wood Mackenzie reported that by the end of next year, the per-kilowatt cost of gas-powered turbines could be 195% higher than where it was in 2019.

However, this shortage is a boon for companies like GE Vernova (NYSE: GEV), Siemens Energy (OTC: SMERY) (OTC: SMEGF), and Mitsubishi Heavy Industries (OTC: MHVYF), which are leading the business. These companies have seen significant revenue growth in recent quarters due to AI data center demand, with GE Vernova's organic revenue growing 12% last quarter led by 14% growth in the power division.

Other notable players in the market include Caterpillar (NYSE: CAT) and Woodward (NASDAQ: WWD), which are also benefiting from the rising price of natural gas turbines. While these companies may not be direct beneficiaries of the turbine business, they are capitalizing on the growing demand for data center power solutions.