U.S. tech and power markets are still reeling from the launch of Chinese firm DeepSeek’s energy-efficient AI chatbot, complicating an already uncertain outlook for AI power demand.

But that uncertainty isn’t scaring away U.S. supermajors Exxon Mobil and Chevron Corp.

“With respect to DeepSeek,” Exxon Chairman and CEO Darren Woods said on a Jan. 31 earnings call, “I would say that hasn’t impacted the conversations to date that we’re having with our customers.”

Tech stocks are paring some of the huge losses incurred by the Chinese DeepSeek threat in late January.

But as Google, Meta, Microsoft, Amazon and the others compete in the current “adapt or die” AI landscape, U.S. gas and power producers are frothing at the mouth with excitement.

Both Exxon and Chevron continue to advance behind-the-meter power-generation projects and conversations with hyperscaler tech firms desperate for reliable supply, executives said in their respective earnings calls on Jan. 31.

Future forecasts for U.S. data center and AI power demand vary widely. So do demand forecasts for the natural gas that will power those energy-hungry data centers.

Gas demand could increase by 10 Bcf/d by 2030 due to AI demand, a 28% increase over the 35 Bcf/d currently consumed for U.S. electricity generation, according to Wells Fargo.

Appalachian gas giant EQT Corp. has told investors could result in as much as 18 Bcf/d in incremental demand by the end of the decade.

Everyone along the energy value chain is excited about the chatter, from gas producers to gas transporters to the power plant operators themselves.

On Jan. 28, Chevron announced a new partnership to develop “scalable, reliable power solutions” for U.S.-based data centers running on natural gas. The partnership includes Engine No. 1 and GE Vernova.

Chevron has secured seven of GE Vernova’s largest 7HA gas-fired turbines under a slot reservation agreement on an accelerated timeline.

Turbine deliveries are expected to begin in late 2026, Chevron Chairman and CEO Mike Wirth said during the company’s Jan. 31 earnings call. In the meantime, Chevron continues to advance site selection and engineering work while engaging with technology customers.

The “power foundry” projects will serve data centers in the U.S. Southeast, Midwest and West regions.

Wirth reminded analysts that Chevron already operates around 5 gigawatts (GW) of power generation for the Gorgon LNG project in Australia, the Tengiz Field Future Growth Project (FGP) in Kazakhstan and its various refinery assets.

“We know how to build and operate large-scale power generation and integrate it to a core customer,” Wirth said.

Chevron also has a “very large natural gas position” in the U.S. to leverage for these projects, he said.

Like its growing LNG business, Chevron sees supplying gas-fired power to data center customers as another profitable outlet for its bountiful gas reserves.


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Chevron power

Chevron produced over 2.7 Bcf/d from its U.S. upstream assets in the fourth quarter; U.S. liquids output averaged nearly 1.2 MMbbl/d.

Chevron’s power foundries will be constructed off the broader grid, or “behind the meter,” and won’t further strain the nation’s already beleaguered power grid infrastructure, Wirth said.

He said the behind-the-meter projects also shouldn’t raise electricity costs for the average ratepaying consumer, like ratepayers are seeing in other parts of the country.

A PJM Interconnection capacity auction last summer hit record highs, driven by rapidly increasing power demand and coal plant retirements. PJM is the grid operator for all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Washington D.C.

Chevron has no intention of being a merchant power player and selling electricity to the grid, Wirth said. Instead, the company will serve as backstop power supply for “premium customers.”

The initial partnership with Engine No. 1 aims to deliver up to 4 GW of generation by the end of 2027.


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Exxon’s CCUS advantage

Exxon Mobil also has a massive U.S. natural gas footprint, including growing volumes from its Permian Basin assets.

U.S. gas production averaged about 3.26 Bcf/d in the fourth quarter, up from 3.14 Bcf/d the quarter before, Exxon said Jan. 31. U.S. liquids output averaged 1.47 MMbbl/d, up from 1.44 MMbbl/d in the third quarter.

Exxon also has a fully-integrated carbon capture, utilization and storage (CCUS) arm to reduce emissions associated with the gas-to-power process—a key advantage for the company in the tech companies’ jockeying race for cleaner electrons.

Exxon owns the nation’s largest carbon dioxide (CO2) transport and storage network, picked up through a $4.9 billion acquisition of CCUS and E&P company Denbury Inc. in 2023.

Decarbonization through CCUS is “the nexus” of Exxon’s data-center power strategy, Woods said.

Like Chevron, Exxon’s not interested in getting into the power utility business. Utility returns for power generation would not compete for capital within the supermajor’s portfolio.

“But leveraging the end-to-end system that we have for capturing, transporting and storing CO2 is a huge advantage and brings a lot of value for hyperscalers who are looking to have decarbonized power and manage their emissions,” Woods said.

Conversations with tech customers continue. Sites for projects have been selected.

Exxon outlined some high-level plans in its corporate update in December: It would construct a natural gas-fired plant capable of generating more than 1.5 GW of power.

The CCUS buildout would remove over 90% of the associated CO2 emissions and transport them for permanent sequestration underground.

And the projects would sit behind the meter, independent of utility timelines and concerns from ratepayers.

Depending on how negotiations proceed, Exxon could have a site powered up and running by 2028 and fully decarbonized by 2029, Woods said.

“I would say it’s a rough order or how to think about that [timeline], but we’re well into the development phase,” he said.


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