Anthropic's IPO Filing Flags Gas Power Risk for Data Centers
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Anthropic's S-1 filing, submitted to the US Securities and Exchange Commission on Monday, says the company's data centers are becoming increasingly reliant on natural gas. The filing names that as a risk to its buildout, because it leaves the company exposed to rising fuel costs and supply chain constraints.
"Competition for access to electrical supply and data center locations with adequate power availability is intense," Anthropic says. Some of its planned data centers rely on electricity from natural gas turbines on site. Anthropic leases capacity from hyperscalers, and last year announced a $50 billion plan to expand data centers in Texas and New York.
Costs on both sides
The filing also treats climate change as a business risk. As temperatures rise, Anthropic says, it will pay more for electricity and water to cool servers. It expects hyperscalers and cloud providers building their own data centers to compete for natural gas and pipeline capacity. "This competition could drive up the price of natural gas," the company notes.
Anthropic also points to public pushback over power bills. "If our efforts to secure electrical power are perceived to affect other utility customers and the broader grid, regulators may impose conditions, standby charges, or other requirements," it says. If regulators make developers carry more of the cost of new energy infrastructure, that could raise Anthropic's operating costs too. Without a secure gas supply and the pipelines to move it, the company says it might need to delay or abandon planned data center projects.
The filing sums up the exposure: any failure to secure adequate electrical power, any legal or regulatory action limiting electricity availability, or any significant rise in energy or compliance costs "could adversely affect our cost structure and limit our ability to scale our compute infrastructure, develop and deploy our models, and service our customers."
The wider picture
The US is planning to build more fossil fuel generation capacity than it has in a decade as data centers push up electricity demand. Gas already makes up the biggest share of the US electricity mix, at 40 percent of generation. A shortage of gas turbines is slowing data center construction, and some developers are installing gas engines on site to avoid long waits for grid connections. Simpler turbine technology at those sites makes on-site generation less efficient and more polluting.
The Trump administration has sought to kill renewable energy projects and tilt regulation in favor of fossil fuels. Trump claims fossil fuels are a more important energy source for powering data centers around the clock than solar and wind farms, which generate power intermittently.
One recent Texas-based study found that data center electricity demand could wipe out decades of air quality gains over the next five years, raising levels of soot, smog-forming pollutants and carbon dioxide. Residents in the US have blocked dozens of proposed data centers.
Source: The Verge