The Daily Planet #80: The AI Bubble, Part 5

The AI Bubble, such as it is, is also keeping another bubble going - the fossil fuel bubble. The energy needs of hyperscalers is ramping up so quickly that the demand for gas turbines is shooting up in response. And like everything else these days, gas based power also plays into today's geopolitics, for gas turbine tech is one that China doesn't control.

The three dominant manufacturers - Mitsubishi Heavy Industries, Siemens Energy, and GE Vernova - control about two-thirds of the global gas turbine market but are struggling to keep pace with soaring orders, which are expected to reach over a thousand units in 2025. This shortage has led to wait times of at least three years for customers, severely impacting emerging markets, especially in Southeast Asia, where countries like Vietnam and the Philippines face delays in completing liquefied natural gas (LNG) power projects.

Data centers require continuous power, and gas turbines, though traditionally used for peak demand, are being deployed as a stopgap. This rush has concentrated demand in the U.S., which now accounts for nearly half of global turbine orders, sidelining Asian markets and complicating their energy transitions.

The turbine shortage highlights the complex interplay between technological advancement, energy security, and climate commitments, revealing that the AI-driven energy demand surge is reshaping global power dynamics and complicating the path to a low-carbon future.

The fallout from the AI-fuelled dash for gas

A supply crunch in giant turbines for gas-powered plants threatens environmental and geopolitical consequences