AI-Driven Energy Crisis Looms as US Faces Natural Gas Shortage by 2028

Artificial intelligence (AI) is transforming various markets, but its impact on energy could be particularly significant. The growth of AI infrastructure is creating a massive demand for electricity, with natural gas sitting at the center of this equation.

Natural gas plants can provide constant baseload power, making them the preferred choice for new AI campuses. However, according to Matthew Smith, chief investment officer of Chronometer Partners, the U.S. is heading towards a structural natural gas shortage by 2028. His firm's research concluded that the country could face a supply deficit even before AI demand reaches full scale.

The numbers tell a concerning story: while production is expected to rise about 20 Bcf per day, LNG export commitments alone consume much of this increase, leaving little room for new AI data centers. Smith warns of a 'knife fight' for available natural gas supplies. If natural gas prices rise due to supply shortages, the effects will ripple across multiple industries.