AI Giant Anthropic Warns Data Center Rush Could Inflate Local Natural Gas Prices

Artificial intelligence giant Anthropic warned investors that data centers competing for natural gas could raise fuel prices in some areas.

Anthropic made the warning in its Form S-1 registration statement for an initial public offering, which it filed with the Securities and Exchange Commission (SEC) on Monday.

“As data center operators increasingly rely on natural gas-fired generation, and because behind-the-meter and on-site arrangements are feasible only in some jurisdictions given the applicable regulatory frameworks, we expect increased competition among users for the same natural gas supply and pipeline capacity in those areas,” the company wrote in the filing.

“This competition could drive up the price of natural gas in such areas and may adversely affect our ability to contract for firm fuel supply and transportation and to secure the pipeline connections and laterals our facilities require,” Anthropic added.

Some of Anthropic’s planned data centers will rely on on-site gas-fired generators, according to the filing.

The company said that setup exposes it to “fuel price volatility and supply disruptions that are outside of our control.”

Anthropic noted that it generally pays fuel costs at those sites “on a pass-through basis without cost caps.”

Anthropic did not immediately respond to the Daily Caller News Foundation’s request for comment.

Anthropic also wrote in the same section of its S-1 that it has promised to cover higher electricity costs its data centers pass on to consumers.

“We have publicly committed to covering the cost of electricity price increases to consumers caused by our data centers, including both the cost of electricity itself and the infrastructure necessary to deliver it,” the filing states.

The filing makes no similar commitment on natural gas prices.

Anthropic wrote that it may be unable “to secure firm gas supply and transportation during the development of a facility, causing a planned site to be delayed or abandoned.”

Anthropic confidentially submitted its first draft of the filing to the SEC on June 1. That version mentioned fuel price volatility at the gas-fired sites but said nothing about competition raising prices.

The competition warning first appeared in a Sept. 4 draft, according to SEC records.

Paul Cicio, president and CEO of the Industrial Energy Consumers of America, a group of manufacturing companies, said pipelines are already limiting how much gas manufacturers can get.