Gas turbines and cooling expertise: Oil service company enters AI data center industry

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As demand in the traditional oil and gas drilling market weakens, oilfield services companies are choosing to accelerate their entry into the data center sector, leveraging existing technical advantages to provide solutions for power generation, cooling, and energy efficiency management.

Crude oil hovered at a low on Thursday, with WTI prices staying around $56, and the mid-term expectation of supply surplus remaining the primary suppressing factor. So far this year, WTI crude has dropped more than 25%, and the number of operational oil and gas rigs in the U.S. has decreased 7% year-on-year to 548 units.

(WTI crude prices fluctuated around $56 on Thursday)

Income pressure is prompting companies to seek new sources of revenue with lower cyclicality; at the same time, surging demand for AI computing power has triggered an urgent need for electricity supply in the data center sector, and oilfield services companies are filling this gap.

Major oilfield service providers such as Baker Hughes, Halliburton, and Schlumberger are supplying data centers with gas turbines, power generation systems, battery storage, and cooling equipment, and are also responsible for system design and maintenance. Investors view this business extension as a more attractive area of growth compared to the traditional oilfield market.

Major Companies Accelerate Their Deployment

Baker Hughes is investing most aggressively in the data center field.

In the first ten months before 2025, the company sold nearly 1.2 GW of gas turbine power equipment to data center clients, and spent over $13 billion to acquire Chart Industries, a U.S. manufacturer of natural gas processing and storage equipment.

The company also provided 16 gas turbines to data center power supplier Frontier Infrastructure. CEO Lorenzo Simonelli stated:

Data centers are growing exponentially; supporting the infrastructure for the AI boom is core to the evolution of the oil and gas industry.

Halliburton in October this year announced the acquisition of a 20% stake in portable gas generator supplier VoltaGrid. The two parties will cooperate to provide power generation systems for data centers, with a focus on the Middle East market. VoltaGrid currently supplies power to Oracle and Musk’s xAI data centers in Memphis, Tennessee.

Schlumberger reported data center business revenues of $331 million in the first nine months before 2025, a 140% year-on-year surge. This is the first time the company has disclosed the performance of this business segment separately. CEO Olivier Le Peuch told the Financial Times: "I see only upside; we can benefit from clients’ diversification into rapidly growing new market segments."

Smaller oilfield services companies are also following suit. ProPetro and Liberty Energy plan to expand their power supply businesses to exceed 1 GW.

Traditional Market Strains Driving Transformation

The transformation of the oilfield services industry stems from a significant slowdown in core business. In addition to falling oil prices and fewer rigs, declining drilling activity has directly slashed demand for oilfield services, squeezing profit margins.

Ryan Duman, Head of Americas Upstream Research at consultancy Wood Mackenzie, points out these factors have put pressure on profitability. Duman said:

Companies have always looked for ways to create new sources of revenue.

Dan Pickering, Chief Investment Officer at investment firm Pickering Energy Partners, pointed out:

Oilfield service companies are leveraging the skills they already possess to enter a market that is growing more robustly and valued higher by investors than the existing oilfield market.

Marc Bianchi, Senior Energy Analyst at TD Cowen, believes this diversification can create a "reserve fund" for companies, helping them avoid "tough choices" during downturns. Bianchi noted:

You don’t need to be as strict on your oilfield services business during a slump because data center cash flow provides a buffer.

Industry Energy Demand Raises Power Concerns

The explosive growth of the data center industry is driven by artificial intelligence, with developers racing to build and maintain facilities capable of handling increasingly power-hungry workloads. However, the industry’s high electricity consumption has sparked concerns over whether existing infrastructure can keep pace.

Grid Strategies predicts that data center growth will lift U.S. electricity demand by 90 GW by 2030, deepening anxiety about utilities’ coping capacities and the impact on residential power bills. This is intensifying pressure on the sector to design self-sustaining power solutions.

Data centers find it difficult to rely entirely on the traditional power grid, creating a market opportunity for oilfield services companies.

The gas generator sets and battery storage systems provided by these companies help data centers establish independent power supply outside the grid, and their accumulated experience in systems design and maintenance in the energy sector is also a competitive advantage.

This trend indicates that the expansion of AI infrastructure is reshaping the energy services landscape—traditional oil and gas companies are finding applications for their technical capabilities in emerging sectors, but it also highlights the structural challenges data center energy demand poses for power systems.

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