(Reuters) -Oil and gas producer Chevron said on Tuesday it plans to build natural gas-based power plants next to data centers in the U.S., as energy demand to support the growth of artificial intelligence is expected to boom.
The second-largest U.S. producer is partnering with investment firm Engine No. 1 and electric services company GE Vernova on the project.
Chevron’s announcement comes a day after Chinese startup DeepSeek unveiled an AI model that it says uses far less computing power than industry-leading models in the United States, prompting investors to question the billions of dollars spent on AI infrastructure and sparking a massive sell-off in tech and power stocks.
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Despite the market’s reaction, DeepSeek demonstrates the energy requirements that will be needed to support the United States’ ability to compete in the global AI race, said Jeff Gustavson, president of Chevron New Energies, during a press briefing.
“It underscores how competitive and fast-moving this is,” he said. “We still see the growth in electricity demand.”
The project will use GE Vernova’s natural gas turbines to deliver up to 4 gigawatts of power – enough to power roughly 3 million homes – to data centers located in the U.S. Southeast, Midwest and West regions.
The power will initially bypass the existing transmission grid, which reduces the risk of raising electricity costs for households and consumers, the company said.
Chevron said it is in conversations with multiple potential customers to determine the locations of the data centers and power plants, declining to name who it is speaking with. Chevron expects to begin initial service by the end of 2027, with the potential for project expansion beyond the 4-GW capacity.
“President Trump’s pro-American energy policies and commitment to energy and AI dominance give us the confidence to invest in projects that will create American jobs and strengthen our national security,” Chevron CEO Mike Wirth said in a statement.
The projects are also expected to be designed to potentially integrate carbon capture and storage, and renewable energy resources.
(Reporting by Vallari Srivastava in Bengaluru and Sheila Dang in Houston; Editing by Leroy Leo and Nia Williams)
