Wall Street predicts gas will power the data center boom

Big U.S. tech companies will turn to natural gas generation and pipelines to power their massive build-out of data center capacity for artificial intelligence, securities analysts at Morgan Stanley predicted in a report Wednesday.

Data center developers “will increasingly gravitate toward large complexes powered by natural gas-fired turbines and fuel cells,” said the analysts, largely because tying into regional electric grids takes too long.

With data center demand for electricity predicted to double or triple before the end of this decade, according to the Lawrence Berkeley National Lab, developers of the sprawling data farms and their AI customers are looking for power everywhere. The endeavor among computing heavyweights to reshape the U.S. economy through AI and to beat China to the most advanced technology has the backing of the Trump administration.

Trump hosted a White House briefing on Tuesday where tech leaders announced plans to invest nearly $500 billion in data center construction through a new venture called “Stargate.” SoftBank, OpenAI, Oracle and MGX were listed as lead investors with Microsoft and Nvidia as participants.