In the arms race for AI computing power, every economic engine is being drawn into the fray—including jet engines. As Silicon Valley giants grapple with securing stable power sources, an unexpected solution is emerging from the aviation industry: repurposing retired Boeing passenger jet engines into ground-based gas turbines to directly supply electricity to data centers.

With AI data centers experiencing exponential growth in power demand, the slow pace of traditional grid expansion has become a major industry bottleneck. In this context, companies like FTAI Aviation and ProEnergy are accelerating the entry of aviation power assets into the electricity market. This cross-sector experiment is not only altering the fate of retired aircraft but also reshaping the global landscape of distributed energy supply.

The premium on speed is creating a clear distinction between immediate availability and long lead times. Currently, the global gas turbine market is dominated by a "big three"—GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries (MHI)—controlling roughly 80% of market share. However, due to surging demand, order backlogs for their large, heavy-duty gas turbines now stretch for several years.

This supply-demand mismatch has created an opportunity for aviation asset management firms like FTAI Aviation. FTAI President David Moreno points out that converting an aircraft engine into a power generation turbine takes only 30 to 45 days. While initial design and adaptation require about 18 months, once the conversion process begins, its delivery efficiency far surpasses that of traditional energy giants.

This "spot availability advantage" has resonated strongly in capital markets. Since announcing its entry into the power business, FTAI's stock price has surged approximately 42%. Jefferies estimates this business could contribute $750 million in annual EBITDA to FTAI, equivalent to 52% of analysts' previous full-year expectations for the company.

The technical rationale for converting aircraft engines for land-based power generation, known as aeroderivative gas turbines, is highly feasible. Aviation turbine expert Mark Axford notes that the conversion centers on two key modifications: replacing fuel nozzles to enable combustion of natural gas instead of jet fuel, and swapping the large front-end flight fan for a smaller fan better suited for power generation.

From an asset lifespan perspective, this represents a precise form of "residual value creation." Engines from narrow-body aircraft, like the CFM56 used on Boeing 737s, endure high-stress cycles from frequent takeoffs and landings during flight. Once converted for ground-based power generation, the wear and tear they experience is significantly reduced. FTAI can extend the usable life of aviation components with only a few years of remaining flight life to several more years in the power generation sector.

This emerging field is already attracting multiple players: ProEnergy is converting engines from Boeing 747 aircraft, while startup Boom Supersonic plans to deliver its converted gas turbines to AI data center service provider Crusoe by 2027.

In response to these new entrants, GE Vernova CEO Scott Strazik recently stated on an earnings call that he does not view these smaller units as direct competition. His argument centers on "efficiency," asserting that the superior fuel efficiency of heavy-duty gas turbines over a typical 20-year operational life remains the financial cornerstone for data center operators.

However, market research firm Thunder Said Energy notes that while heavy-duty turbines are more efficient, they are also expensive and face interminable wait times. To address the efficiency gap, both FTAI and Boom Supersonic propose configuring their products for "combined cycle" operation, using a steam turbine to capture waste heat, thereby closing the efficiency gap with heavy-duty units.

A more profound impact lies in the potential scale of production. Jefferies analyst Sheila Kahyaoglu points out that approximately 1,600 commercial engines are retired globally each year. If one-third of these were converted for power generation, it would add 13 GW of new capacity, equating to a quarter of the world's annual manufacturing output. The U.S. Energy Information Administration (EIA) even estimates the potential conversion capacity from retired military engines could be as high as 40 GW.

This shift in capacity allocation is not without risk. If a significant volume of aviation parts is diverted to the power sector, it could exacerbate the already critical shortages in the aviation maintenance market, potentially triggering ripple effects on the operating costs of airlines worldwide.