The AI boom is making natural gas great again

Driving the news: Nearly 75% of the power equipment planned to be used on site at data centers is natural gas, according to a report released Tuesday by Cleanview, a market intelligence platform.

"Press releases for these projects say one thing. But the 35+ permit documents, site plans, and equipment deals we found tell a much different story," the report finds.

• Despite public nods to renewables, hydrogen, or nuclear, the equipment being installed this year and next is "almost entirely gas-powered."

By the numbers: Cleanview identified 46 data centers planning to build their own on-site power, with a combined capacity of 56 gigawatts.

• That represents roughly 30% of all planned data center capacity in the United States.
• It's roughly five times the peak electricity demand of New York City.

Between the lines: "This is a very new trend," Cleanview's Michael Thomas wrote recently. "A little more than a year ago, virtually all data center developers planned to use the electric grid to power 100% of their projects."

The big picture: Wind, solar, and batteries are cheaper in a lot of places. But the AI race is so intense that companies are choosing power they can get now over power that's cheaper later, amid years-long grid connection delays.

• "The rub for solar and wind developers is that they're essentially locked out of this market until" developers begin building renewable-energy farms adjacent to data centers, Thomas told Axios in an interview.

Zoom out: Natural gas is already the largest source of electricity on U.S. power grids — and it's also dominating data centers that do connect to the grid, particularly in the Mid-Atlantic and Midwest, the country's AI hotbed.

Flashback: A decade ago, natural gas was becoming politically toxic, with some activists and lawmakers pushing to ban it alongside coal.

• Now, as global climate ambitions falter and AI drives a race for power, gas is regaining political and commercial appeal.

The intrigue: Bloom Energy, which makes natural-gas-powered fuel cells, is one of the few success stories of Cleantech 1.0, a cycle of mostly failed venture capital investing from more than a decade ago.

• CEO KR Sridhar argues gas can be a climate solution — despite its continued role in warming the planet.
• "If we switch from coal to gas right now, we can bring about a 60% reduction in carbon dioxide," he said at the World Economic Forum in Davos, Switzerland, last month.
• He added that the company is in early talks with hyperscalers about capturing carbon dioxide from some facilities.

What we're watching: How far this shift goes.

• Bloom Energy recently found that 44% of data-center operators expect to rely entirely on on-site power by 2035 — a trend that's helped fuel the company's meteoric stock rise.

Sign up here for Axios' Future of Energy newsletter.