Big Oil wants to help Big Tech power artificial intelligence data centers

Exxon Mobil and Chevron are jumping into the race to power artificial intelligence data centers, as the two oil majors bet tech companies will ultimately turn to natural gas to meet their tremendous energy needs.

Exxon unveiled plans this week to build a natural gas plant to power a data center. The oil major says it would then use carbon capture and storage technology to reduce the emissions of the plant by 90%.

“We’re working with other large cap industrials to rapidly deploy a solution that would provide both high reliability and low carbon intensity power to meet the growing demand for computing power for artificial intelligence,” Exxon Chief Financial Officer Kathryn Mikells told Wall Street analysts Wednesday without disclosing names of the companies’ the oil major is working with on the project.

The gas plant would not rely on the electric grid and would be independent of utilities, allowing faster installation than traditional power generation projects, Mikells said. Exxon has not disclosed a customer or a timeline for the project.

Exxon has invested heavily in building a carbon capture network along the Gulf Coast with more than 900 miles of pipeline to transport CO2 from several industrial customers to permanent storage sites. The oil major estimates decarbonizing AI data centers could represent up to 20% of its total addressable market for carbon capture and storage by 2050.

Chevron is also working on ways to power data centers, said Jeff Gustavson, president of the oil company’s new energy business, at the Reuters NEXT conference on Wednesday.

“This is something that our company is very well positioned to participate in,” Gustavson said. Chevron is a major national gas producer with power generation equipment and very large tracts of land that could be used for data centers, the executive said.

Alphabet, Amazon, Microsoft and Meta have primarily bought wind and solar power for their data centers as they seek to mitigate the impact of their businesses on the climate. But the power needs of artificial intelligence are growing so large that the tech companies are searching for sources of electricity that are more reliable than renewable energy.

The tech companies have shown a growing interest in nuclear power as a consequence. Microsoft is helping to bring the Three Mile Island nuclear reactor back online by purchasing power from the plant. Amazon and Alphabet’s Google unit are investing in next-generation, small nuclear reactors. Meta recently called on companies to send it proposals to build new nuclear plants.

But the fossil fuel industry and energy analysts have argued for months that the tech sector will ultimately have to embrace natural gas because nuclear plants simply take too long to build.

Exxon CEO Darren Woods took a swipe at nuclear power Wednesday and claimed his company is better positioned than any in the U.S. to meet the power needs of AI in the immediate and near…