Anthropic spends $3.4 billion on gas generators to secure AI power

Securing the energy backbone

Anthropic has entered into a significant agreement to secure its future energy needs. As reported by the Financial Times, the company signed a $3.4 billion deal for 1.7 gigawatts of gas-fired generators from OnePWR Solutions. This represents the biggest single acquisition of power-making hardware by an AI firm that is currently known.

The deal was finalized in late September and focuses on heavy-duty gas-fired generators. By securing these commitments, Anthropic is attempting to solve the structural bottleneck of electricity availability. The company is moving toward a model of vertical integration to ensure its data centers remain operational as demand for AI computing grows.

The purchase includes the necessary engineering and construction capabilities required to install the units. This means Anthropic is not just buying hardware but also the expertise to build out the infrastructure. This move comes as the company prepares for a major public listing, highlighting the urgency of its infrastructure expansion.

Bypassing the middleman

Traditionally, AI developers have relied on external utilities and specialist power companies to fuel their data centers. However, the Financial Times reports that these companies are now using their financial muscle to cut out intermediaries. By taking direct control of production, they can better manage the high costs and limitations of the current power grid.

OnePWR Solutions had originally ordered these generators from Caterpillar two years ago but required financing to complete the transaction. Anthropic stepped in to take over these existing orders rather than buying the company itself. This allowed Anthropic to acquire equipment that was ordered years earlier before prices surged in the energy market.

This strategy is distinct from other recent moves in the space. For example, xAI bought mobile gas turbines, and Alphabet acquired the energy developer Intersect. Anthropic's approach is unique because it focuses on taking over a specific order book and installation capability without transferring any employees or factories.

The cost of reliable power

The financial scale of this deal provides a clear picture of the costs associated with AI scaling. Based on the reported figures, the purchase works out to approximately $2.0 million per megawatt, or roughly $2,000 per kilowatt. This price covers both the equipment commitments and the construction work needed to get the generators online.

While $3.4 billion is a massive sum, it represents a relatively small portion of Anthropic's total financial position. The company is expected to have close to $150 billion in cash and liquid investments. The generator deal accounts for about 2.3% of that cash and a small fraction of its total computing infrastructure spending through 2045.

The deal also sits in contrast to Anthropic's other operational costs. For instance, the company's monthly fees to SpaceX for using computing space are expected to hit $3.1 billion by the end of the year. This means the one-time generator purchase is nearly equal to the amount the company pays for leased capacity every single month.

Strategic timing and IPO

Anthropic is making these moves while preparing for a highly anticipated IPO. The company expects to raise between $80 billion and $100 billion before Thanksgiving. This funding is intended to finance its massive infrastructure spending, which includes nearly $900 billion in computing commitments through 2045.

The timing of the generator purchase is critical due to manufacturing delays. The Financial Times notes that lead times for gas turbines and generators are currently stretching years into the future. By securing a position in a pre-existing order book, Anthropic ensures its equipment will be available in the near term and over the next two years.

Investors are watching these moves closely as the company seeks a high valuation. While the company is expanding its physical footprint, some analysts have warned of potential credit rating risks. Nevertheless, the move to own power infrastructure is seen as a way to protect the company against disruptions, as Arash Nazhad of Stifel told the Financial Times: "By owning some of their power infrastructure... companies believe they can better protect themselves."