The "power shortage" in the United States triggered by artificial intelligence (AI) data centers is pushing a traditional heavy industrial equipment—heavy-duty gas turbines—to the forefront of the technological revolution.

The market's fervent demand is ushering in a golden age for the three industry oligarchs: GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries, with orders and prices soaring across the board.

However, facing this "windfall opportunity," the three giants have not chosen to expand production at full capacity.

The reason lies in the lingering "ghost" of the industry collapse caused by the internet bubble burst 20 years ago. Therefore, caught between historical lessons and current interests, they have unanimously chosen a cautious response of limited expansion.

**From "Computing Power Race" to "Power Race": Demand Explosion and Policy Support**

The essence of the AI race is a computing power race, and the foundation of computing power is stable and massive electricity supply.

For this reason, the demand for providing electricity to AI data centers is surging at an unprecedented pace. In this context, gas turbines, with their high efficiency, flexibility, and lower pollution compared to coal, have replaced coal-fired units to become the "backbone" supporting the US power grid.

The market's reaction has been direct and dramatic. According to data from research company Oxcap, since mid-2023, the cost of building new gas-fired power plants has roughly doubled, with the primary driver being the rise in gas turbine prices. Utilities and tech giants, seeking to secure future energy security, have locked in orders through the late 2020s. Beyond AI, the resurgence of US manufacturing, the proliferation of electric vehicles, and electrification transformation in other sectors continue to drive up overall electricity demand.

Meanwhile, US energy policy has also provided a "tailwind" for natural gas power generation. The Trump administration is eager to provide sufficient electricity for server clusters and factories, viewing gas turbines as a key transitional solution to shoulder the burden before the next generation of nuclear power plants comes online. Its gradual elimination of clean energy subsidies has also impacted supply expectations for renewable energy.

Analysis indicates that after the passage of the "One Big Beautiful Bill Act," forecasts for new US wind, solar, and battery capacity over the next five years have been revised down by 23%, further intensifying market dependence on natural gas power generation.

**Learning from History: The "Ghost" of the 2000 Internet Bubble**

Despite the heated market, the three major gas turbine manufacturers appear unusually cautious regarding production expansion. This caution stems from a deep understanding of the industry's cyclical volatility and painful memories of the early 2000s industry disaster.

"This is a cyclical industry and will remain cyclical in the future," Siemens Energy CEO Christian Bruch stated bluntly. "Gas turbine demand will decline someday."

Looking back at history, in the early 2000s, the market made overly optimistic predictions about internet electricity demand, triggering a debt-driven frenzy of gas plant construction. Eventually, with the internet bubble burst, power giants like Calpine declared bankruptcy, and gas turbine manufacturers found themselves mired in severe overcapacity.

Mitsubishi Power Americas CEO Bill Newsom candidly admitted that the company faces the enormous internal challenge of "distinguishing which demand is real and which is not."

Ryan Luther, Director of Energy Transition Research at energy data company Enverus, pointed out the game theory dilemma facing the current market:

"If no one increases production, prices can remain high. But if just one company significantly ramps up production, it could cause a market-wide price collapse."

**Limited Expansion**

After repeatedly weighing historical lessons against current interests, the three giants have all chosen to "play it safe" with limited capacity expansion.

GE Vernova has announced plans to invest over $300 million, aiming to increase its annual heavy-duty gas turbine delivery capacity from the recent average of 55 units to 80 units.

Siemens Energy plans to increase capacity by 30% to 40%, while clearly stating it will avoid high-risk bets on 2030s market prospects.

Mitsubishi Heavy Industries expects to invest hundreds of millions of dollars to expand its US production scale.

Artem Abramov, Associate Vice President of Analysis at energy consulting firm Rystad Energy, believes these expansion plans are "far from proportionate" to the demand growth of the past two years:

"The expansion plans show (the giants') unwillingness to over-commit."

Notably, bottlenecks have now spread from final assembly plants to upstream suppliers.

The supply of key materials like specialty alloys that form the core of gas turbines is extremely tight. ATI CEO Kimberly Fields revealed that last year, a major turbine manufacturer agreed to co-invest with ATI in expanding plant capacity to avoid material shortages. She stated that for these giants:

"The risk now is whether they can obtain materials, while price has become a secondary concern."