Anthropic S-1 reveals gas power risks

Anthropic filed its S-1 with the Securities and Exchange Commission on Monday, detailing how its reliance on natural gas creates financial risk for the company. The filing confirms that some planned data centers depend on electricity generated by on-site gas turbines.

Anthropic announced a $50 billion plan last year to expand data centers in Texas and New York. The company leases capacity from hyperscalers but is building out its own infrastructure to meet growing demand. The filing notes that competition for electrical supply and data center locations with adequate power is intense.

A global shortage of gas turbines is currently slowing data center construction. Developers are installing gas engines on-site to avoid long wait times for grid connections. They are also using simpler turbine technology to bypass manufacturer backlogs, which results in less efficient and more polluting power generation.

Gas accounts for 40 percent of US power generation. The administration has prioritized fossil fuels over intermittent renewable energy sources for data centers. A recent Texas-based study found that data center electricity demand could erase decades of air quality gains in the next five years by increasing soot, smog-forming pollutants, and carbon dioxide.

Anthropic states that rising global temperatures will increase its operating costs. The company expects to pay more for electricity and water used to cool servers as temperatures climb. It also faces increased competition for natural gas and pipeline capacity from other hyperscalers and cloud service providers.

This competition could drive up the price of natural gas, according to the filing. Anthropic acknowledges that if regulators impose conditions or standby charges to address impacts on the broader grid, its operating costs will rise. The company notes that without a secure gas supply and pipelines, it might need to delay or abandon planned projects.

The filing warns that a failure to secure adequate electrical power or a significant increase in energy costs could limit the company's ability to scale. This includes developing and deploying models and servicing customers. Anthropic says these factors could adversely affect its cost structure and growth.