Artificial intelligence companies are strengthening their partnerships with fossil fuel industries, as major tech firms strike big deals to power their energy-intensive data centers and integrate machine learning into the energy sector. This trend is driving a surge in natural gas demand in the United States, with experts predicting that data center hyperscalers will prolong the use of fossil fuels globally, even as clean energy adoption accelerates.
OpenAI, the company behind ChatGPT, recently signed an agreement with Abu Dhabi's ADNOC to deploy advanced AI capabilities across the state energy firm's operations. This deal highlights a broader push by tech companies to offer AI-driven tools for operating drilling rigs, refineries, and other oil assets, as reported by Semafor.
The relationship between AI and fossil fuels is mutually beneficial. Big Tech is expanding data centers faster than power grids can support, leading to legislation under the Trump administration that requires tech companies to secure their own energy sources. This has resulted in massive natural gas contracts, with Amazon building a gas-fired power plant in Texas and Nvidia partnering with SoftBank and the U.S. government to construct the largest fossil-fuel plant in the country to power an OpenAI project in Ohio. Microsoft has also signed a 20-year deal with Chevron for 2.67 gigawatts of natural-gas-fired power for a proposed West Texas data center.
While AI advocates argue that the technology will ultimately save more energy than it consumes through efficiency gains, a recent study by NPJ Climate Action warns that if fossil fuels see any economic gains from AI integration, enabled emissions will outweigh avoided emissions. In a scenario where both sectors benefit equally, global CO2 emissions could increase by 0.47 to 1.8 billion tons annually, equivalent to Mexico's annual emissions, according to Holly Alpine, a co-author of the research.
Despite these concerns, AI firms are eagerly courting fossil fuel companies to secure long-term contracts. The OpenAI-ADNOC deal exemplifies the direction of the industry, raising questions about the environmental impact of these partnerships.