Big Tech seeks assistance from Big Oil in powering AI data centers.

• AI data centers are attracting the attention of Exxon Mobil and Chevron.
• Exxon plans to construct a natural gas power plant for a data center and employ carbon capture technology to drastically reduce the plant's emissions.
• According to Exxon CEO Darren Woods, decarbonized natural gas plants are a more expedient solution to the tech industry's energy demands compared to nuclear power.

The oil majors are competing to become leaders in artificial intelligence data centers, as they believe that tech companies will eventually rely on natural gas to meet their massive energy demands.

This week, Exxon announced plans to construct a natural gas plant to power a data center. The company claims that it will employ carbon capture and storage technology to decrease the emissions of the plant by 90%.

Exxon Chief Financial Officer Kathryn Mikells revealed that the oil major is collaborating with other large cap industrials to quickly implement a solution that guarantees high reliability and low carbon intensity power to meet the increasing demand for computing power for artificial intelligence. She did not disclose the names of the companies involved in the project.

The gas plant would not be dependent on the electric grid and would not require utilities, enabling quicker installation than typical power generation projects, according to Mikells. Exxon has not revealed any information about the project's customer or timeline.

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

At the Reuters NEXT conference on Wednesday, Jeff Gustavson, president of Chevron's new energy business, stated that the company is also exploring ways to power data centers.

Chevron, as a major national gas producer with power generation equipment and vast tracts of land, is well-positioned to participate in data center development, Gustavson stated.

Gas over nuclear

While tech companies have primarily relied on wind and solar power for their data centers to reduce their carbon footprint, the increasing energy demands of artificial intelligence have prompted them to look for more dependable sources of electricity than renewable energy.

Nuclear power has gained traction among tech companies, with Microsoft, Amazon, and Alphabet's Google unit investing in it. Microsoft is also helping to bring the Three Mile Island nuclear reactor back online by purchasing power from it. Meta has called on companies to send proposals to build new nuclear plants.

The tech sector will have to embrace natural gas because nuclear plants take too long to build, according to the fossil fuel industry and energy analysts.

Darren Woods, CEO of Exxon, criticized nuclear power on Wednesday and stated that his company is better suited to meet the power demands of AI in the near future.

According to Woods, if you're banking on nuclear energy and something in the future, there's a long road ahead of us. The small nuclear reactors that tech companies are investing in are not expected to be commercialized until the 2030s.

Exxon CEO stated that the company is not interested in launching a power generation business but plans to utilize its expertise in managing large-scale projects to assist in the installation of power generation for data centers during the initial stages of the AI growth.

Exxon will prioritize capturing and storing emissions from data centers and providing decarbonized natural gas to power plants running AI after the initial phase, according to Woods.