Energy giant Chevron is collaborating with Engine No. 1 and GE Vernova to establish natural gas power plants across the United States, specifically designed to meet the rising energy demands of data centers that support the burgeoning field of artificial intelligence.
This initiative aims to develop a multi-gigawatt co-located power plant and data center setup. The timing of this collaboration coincides with the recent announcement from Chinese tech startup DeepSeek, which has introduced a new AI chatbot that has ignited discussions about the competition in the AI sector between China and the U.S. Users have been rushing to explore this new alternative to OpenAI’s ChatGPT, leading to fluctuations in stock prices for several prominent tech companies on Wall Street, including some in the energy sector.
The debut of DeepSeek’s AI assistant has raised questions about whether the Chinese firm can match the capabilities of leading American AI companies while operating at significantly lower costs. Additionally, an executive order on AI signed last week by former President Donald Trump aims to dismantle prior government policies that he claimed obstruct American AI innovation. The order also promoted a collaborative investment of up to $500 billion, which is associated with infrastructure for AI, involving a newly formed partnership including OpenAI, Oracle, and SoftBank.
The new collaborative venture, named Stargate, is set to begin the construction of data centers in Texas, alongside the electricity infrastructure necessary to support the swift advancement of AI technologies. The initial funding for this venture is projected at around $100 billion and has the potential to grow up to five times that amount.
Chevron, Engine No. 1, and GE Vernova announced on Tuesday their plans for initial projects termed “power foundries,” which are expected to utilize seven domestically produced GE Vernova 7HA natural gas turbines. These projects are intended to cater to data centers located in the Southeastern, Midwestern, and Western regions of the United States, although specific locations have not yet been chosen.
The companies emphasized that the generated power will not be funneled through the existing transmission grid at the beginning, which helps mitigate the risk of increasing electricity costs for consumers.
The collaborative project aims to provide up to four gigawatts of electricity, which is sufficient to energize approximately 3 to 3.5 million American households. The initial service is expected to start by the end of 2027, with possibilities for further expansion in the future.
“Energy is crucial for maintaining America’s leadership in AI. By utilizing the abundant domestic supply of natural gas to generate electricity that directly supports data centers, we can secure our position in AI, spur productivity across the economy, and restore the nation’s image as an industrial powerhouse,” remarked Chris James, the founder and chief investment officer at Engine No. 1. He added that this collaboration with Chevron and GE Vernova is pivotal in addressing the most significant energy challenges ahead.
