By Jinjoo Lee

The spotlight this week on Chinese company DeepSeek's sophisticated, less resource-intensive artificial intelligence model has investors questioning just how enduring AI-powered electricity demand growth will be. But tech giants such as Microsoft and Meta Platforms have recently affirmed that they still plan to spend tens of billions on data centers in the near term.

With the long-term picture looking more uncertain, speed will be that much more important for power generators looking to capitalize on data center demand. Oil majors Exxon Mobil and Chevron think they can bring that.

On its earnings call Friday morning, Exxon's Chief Executive Darren Woods said it could get its proposed natural gas-fired power project site "up and going by 2028," with carbon capture capacity added by 2029. "We'll bring this on faster than anybody else in the industry," he said. Woods also said that recent concerns around DeepSeek haven't impacted conversations with potential data center customers for its proposed 1.5 Gigawatt project.

Chevron, which announced earlier this week that it plans to develop 4 GW of carbon capture-paired natural gas-fired power projects alongside Engine No. 1 and GE Vernova, has said that its project has a targeted in-service date of 2027. "We think [that is] ahead of nearly all of our competitors in this space," said Jeff Gustavson, vice president of lower carbon energies at Chevron, on a call with journalists earlier this week. The company said it has reserved seven turbines from GE Vernova for the project.

The oil majors clearly have some natural advantages: They have a deep well of experience in building and operating gas-fired power plants to support their own energy-intensive operations. They also have the capacity to finance projects quickly and cheaply, without needing to tap external sources.

The DeepSeek news didn't affect Exxon and Chevron's stock prices because the planned power projects are tiny compared with their massive oil-and-gas business. But it did send AI-linked energy stocks such as Vistra, Constellation Energy and GE Vernova plunging earlier this week, followed by a partial recovery. In upcoming earnings calls, investors will be eager to know just how quickly those companies can capitalize on data centers' power demands.

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(END) Dow Jones Newswires

January 31, 2025 12:45 ET (17:45 GMT)

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