Anthropic’s IPO Filing Admits the AI Boom Runs on Natural Gas

October 27 — According to a report this morning (27th) by The Verge, Anthropic, which is preparing to list, reveals in its S-1 registration filing the generative AI industry’s heavy dependence on methane. The filing says power supply, and data centre sites with good access to power, are both facing fierce competition.

In the document filed with the US Securities and Exchange Commission, Anthropic acknowledges that data centres increasingly rely on “natural gas,” whose main component is methane.

That means Anthropic’s plans to build AI data centres will be constrained by fuel prices and supply chain bottlenecks. The filing also acknowledges that rising global temperatures caused by burning fossil fuels will further push up its own operating costs.

Some planned data centres will need to generate power on site with gas turbines. Anthropic rents computing resources from large cloud providers, and last year announced a $50 billion investment plan (about 334.2 billion yuan) to expand data centres in Texas and New York.

The United States has the densest concentration of data centres in the world. To meet their growing electricity demand, the fossil fuel generation capacity planned in the US will reach its highest level in a decade.

Shortages of gas turbines are also slowing data centre construction. To shorten waits for grid connections, some developers are installing gas reciprocating engines to generate their own power. Because turbine makers have a backlog of orders, developers have also turned to technically simpler turbines, which lowers on-site generation efficiency and increases pollution.

Data centres add greenhouse gas emissions, yet in its listing document Anthropic treats climate change as a business risk: as temperatures rise, the electricity and water needed to cool servers will cost more.

Anthropic also expects that, as large cloud providers and data centre operators race to build, competition for natural gas supply and pipeline capacity will intensify, potentially pushing gas prices up.

Natural gas accounts for 40% of US electricity generation, making it the country’s main source of power. As utilities step up work on energy infrastructure to meet growing demand, American households are bearing rising costs.

Residents unhappy about data centre construction across the US have succeeded in blocking dozens of proposed projects. Anthropic acknowledges that concern about sharply higher electricity bills alone can affect a project’s progress: “If the steps we take to secure power supply are seen as affecting other electricity users and the grid as a whole, regulators may attach conditions, impose standby supply charges or make other requirements to address those effects.”

If regulators require data centre developers to bear more of the cost of new energy infrastructure, Anthropic’s operating expenses could rise further. And if a steady gas supply cannot be secured, or the pipelines needed to deliver it are missing, some data centre plans may even have to be delayed or cancelled. These problems could ultimately constrain Anthropic’s business growth.