The AI period is giving fracking a second act, a shocking twist for an trade that, even throughout its early 2010s growth years, was blamed by local weather advocates for poisoned water tables, man-made earthquakes, and the cussed persistence of fossil fuels.
AI firms are constructing large information facilities close to main gas-production websites, usually producing their very own energy by tapping immediately into fossil fuels. It’s a development that’s been overshadowed by headlines in regards to the intersection of AI and healthcare (and fixing local weather change), nevertheless it’s one that would reshape — and lift tough questions for — the communities that host these amenities.
Take the newest instance. This week, the Wall Road Journal reported that AI coding assistant startup Poolside is developing an information middle complicated on greater than 500 acres in West Texas — about 300 miles west of Dallas — a footprint two-thirds the scale of Central Park. The power will generate its personal energy by tapping pure fuel from the Permian Basin, the nation’s best oil and fuel area, the place hydraulic fracturing isn’t simply frequent however actually the one recreation on the town.
The undertaking, dubbed Horizon, will produce two gigawatts of computing energy. That’s equal to the Hoover Dam’s complete electrical capability, besides as an alternative of harnessing the Colorado River, it’s burning fracked fuel. Poolside is creating the ability with CoreWeave, a cloud computing firm that rents out entry to Nvidia AI chips and that’s supplying entry to greater than 40,000 of them. The Journal calls it an “power Wild West,” which appears apt.
But Poolside is way from alone. Almost all the most important AI gamers are pursuing comparable methods. Final month, OpenAI CEO Sam Altman toured his firm’s flagship Stargate information middle in Abilene, Texas — round 200 miles from the Permian Basin — the place he was candid, saying, “We’re burning fuel to run this information middle.”
The complicated requires about 900 megawatts of electrical energy throughout eight buildings and features a new gas-fired energy plant utilizing generators comparable to those who energy warships, based on the Related Press. The businesses say the plant supplies solely backup energy, with most electrical energy coming from the native grid. That grid, for the report, attracts from a mixture of pure fuel and the sprawling wind and photo voltaic farms in West Texas.
However the folks residing close to these initiatives aren’t precisely comforted. Arlene Mendler lives throughout the road from Stargate. She informed the AP she needs somebody had requested her opinion earlier than bulldozers eradicated an enormous tract of mesquite shrubland to make room for what’s being constructed atop it.
Techcrunch occasion
San Francisco
|
October 27-29, 2025
“It has fully modified the way in which we had been residing,” Mendler informed the AP. She moved to the world 33 years in the past searching for “peace, quiet, tranquility.” Now development is the soundtrack within the background, and vibrant lights on the scene have spoiled her nighttime views.
Then there’s the water. In drought-prone West Texas, locals are significantly nervous about how new information facilities will impression the water provide. Town’s reservoirs had been at roughly half-capacity throughout Altman’s go to, with residents on a twice-weekly outside watering schedule. Oracle claims every of the eight buildings will want simply 12,000 gallons per 12 months after an preliminary million-gallon fill for closed-loop cooling techniques. However Shaolei Ren, a College of California, Riverside professor who research AI’s environmental footprint, informed the AP that’s deceptive. These techniques require extra electrical energy, which implies extra oblique water consumption on the energy vegetation producing that electrical energy.
Meta is pursuing the same technique. In Richland Parish, the poorest area of Louisiana, the corporate plans to construct a $10 billion information middle the scale of 1,700 soccer fields that may require two gigawatts of energy for computation alone. Utility firm Entergy will spend $3.2 billion to construct three giant natural-gas energy vegetation with 2.3 gigawatts of capability to feed the ability by burning fuel extracted by means of fracking within the close by Haynesville Shale. Louisiana residents, like these in Abilene, aren’t thrilled to be encircled by bulldozers across the clock.
(Meta can also be constructing in Texas, although elsewhere within the state. This week the corporate introduced a $1.5 billion information middle in El Paso, close to the New Mexico border, with one gigawatt of capability anticipated on-line in 2028. El Paso isn’t close to the Permian Basin, and Meta says the ability can be matched with 100% clear and renewable power. One level for Meta.)
Even Elon Musk’s xAI, whose Memphis facility has generated appreciable controversy this 12 months, has fracking connections. Memphis Gentle, Fuel and Water – which at the moment sells energy to xAI however will finally personal the substations xAI is constructing – purchases pure fuel on the spot market and pipes it to Memphis by way of two firms: Texas Fuel Transmission Corp. and Trunkline Fuel Firm.
Texas Fuel Transmission is a bidirectional pipeline carrying pure fuel from Gulf Coast provide areas and several other main hydraulically fractured shale formations by means of Arkansas, Mississippi, Kentucky, and Tennessee. Trunkline Fuel Firm, the opposite Memphis provider, additionally carries pure fuel from fracked sources.
When you’re questioning why AI firms are pursuing this path, they’ll inform you it’s not nearly electrical energy; it’s additionally about beating China.
That was the argument Chris Lehane made final week. Lehane, a veteran political operative who joined OpenAI as vice chairman of worldwide affairs in 2024, laid out the case throughout an on-stage interview with TechCrunch.
“We consider that within the not-too-distant future, at the very least within the U.S., and actually around the globe, we’re going to should be producing within the neighborhood of a gigawatt of power per week,” Lehane mentioned. He pointed to China’s large power buildout: 450 gigawatts and 33 nuclear amenities constructed within the final 12 months alone.
When TechCrunch requested about Stargate’s resolution to construct in economically challenged areas like Abilene, or Lordstown, Ohio, the place extra gas-powered vegetation are deliberate, Lehane returned to geopolitics. “If we [as a country] do that proper, you might have a chance to re-industrialize nations, convey manufacturing again and in addition transition our power techniques in order that we do the modernization that should happen.”
The Trump administration is definitely on board. The July 2025 government order fast-tracks gas-powered AI information facilities by streamlining environmental permits, providing monetary incentives, and opening federal lands for initiatives utilizing pure fuel, coal, or nuclear energy — whereas explicitly excluding renewables from help.
For now, most AI customers stay largely unaware of the carbon footprint behind their dazzling new toys and work instruments. They’re extra centered on capabilities like Sora 2 – OpenAI’s hyperrealistic video-generation product that requires exponentially extra power than a easy chatbot – than on the place the electrical energy comes from.
The businesses are relying on this. They’ve positioned pure fuel because the pragmatic, inevitable reply to AI’s exploding energy calls for. However the pace and scale of this fossil gasoline buildout deserves extra consideration than it’s getting.
If this can be a bubble, it received’t be fairly. The AI sector has change into a round firing squad of dependencies: OpenAI wants Microsoft wants Nvidia wants Broadcom wants Oracle wants information middle operators who want OpenAI. They’re all shopping for from and promoting to one another in a self-reinforcing loop. The Monetary Occasions famous this week if the inspiration cracks, there’ll be a variety of costly infrastructure left standing round, each the digital and the gas-burning variety.
OpenAI’s capability alone to fulfill its obligations is “more and more a priority for the wider financial system,” the outlet wrote.
One key query that’s been largely absent from the dialog is whether or not all this new capability is even mandatory. A Duke College examine discovered that utilities usually use solely 53% of their accessible capability all year long. That means important room to accommodate new demand with out developing new energy vegetation, as MIT Know-how Evaluation reported earlier this 12 months.
The Duke researchers estimate that if information facilities decreased electrical energy consumption by roughly half for only a few hours throughout annual peak demand intervals, utilities may deal with an extra 76 gigawatts of recent load. That will successfully take up the 65 gigawatts information facilities are projected to want by 2029.
That sort of flexibility would enable firms to launch AI information facilities sooner. Extra importantly, it may present a reprieve from the frenzy to construct pure fuel infrastructure, giving utilities time to develop cleaner options.
However once more, that might imply dropping floor to an autocratic regime, per Lehane and lots of others within the trade, so as an alternative, the pure fuel constructing spree seems more likely to saddle areas with extra fossil-fuel vegetation and go away residents with hovering electrical energy payments to finance immediately’s investments, together with lengthy after the tech firms’ contracts expire.
Meta, as an illustration, has assured it should cowl Entergy’s prices for the brand new Louisiana technology for 15 years. Poolside’s lease with CoreWeave runs for 15 years. What occurs to prospects when these contracts finish stays an open query.
Issues might finally change. Plenty of non-public cash is being funneled into small modular reactors and photo voltaic installations with the expectation that these cleaner power options will change into extra central power sources for these information facilities. Fusion startups like Helion and Commonwealth Fusion Methods have equally raised substantial funding from these the entrance traces of AI, together with Nvidia and Altman.
This optimism isn’t confined to personal funding circles. The thrill has spilled over into public markets, the place a number of “non-revenue-generating” power firms which have managed to go public have really anticipatory, market caps, based mostly on the expectation that they are going to sooner or later gasoline these information facilities.
Within the meantime — which may nonetheless be a long time — essentially the most urgent concern is that the individuals who’ll be left holding the bag, financially and environmentally, by no means requested for any of this within the first place.
