Oil giants enter the AI sector, planning to use carbon capture to reduce emissions from data centers.

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Facing the explosive growth in energy demand triggered by AI, traditional oil giant ExxonMobil is planning to apply its core "carbon capture technology" to an unexpected new field—providing low-carbon power solutions for AI data centers to achieve large-scale emission reductions.

According to ExxonMobil CEO Darren Woods, who spoke on the company's earnings call last Friday, the company is currently in "quite in-depth conversations" with multiple power suppliers and tech companies, aiming to reduce the carbon emissions of AI data centers powered by natural gas through the deployment of carbon capture technology.

Woods made it clear that the company's goal is to capture 90% of the CO₂ emissions generated by natural gas power plants supplying electricity to data centers. At the same time, he confidently emphasized that for "hyperscale" technology companies seeking low-emission facilities, ExxonMobil's solution might be "the only realistic choice" in the short- to medium-term.

This move comes at a critical juncture. In the past two years, the market has become clearly polarized: utility stocks directly related to AI computing demand—such as power, natural gas, and nuclear energy—have surged, while stocks of traditional oil exploration and refining companies linked to oil prices have performed modestly. ExxonMobil's new strategy may create a new connection between traditional energy stocks and the high-growth tech sector.

AI Energy Consumption Soars, Natural Gas Becomes a New Choice

The rapid development of AI has brought enormous demand for energy, especially for reliable power that can operate 24/7 without interruption.

According to CNBC, the tech industry previously primarily offset the carbon emissions of its data centers by purchasing renewable energy. However, to ensure power supply stability, these companies are now turning to nuclear energy and natural gas. The reliability of natural gas power generation makes it a backup or main solution to meet the massive and stable electricity demands of data centers.

A specific example is Meta, which has signed an agreement with Entergy, a utility company in Louisiana, to use natural gas to power a data center campus. This trend shows that despite tech companies' emission reduction targets, the real demand for reliable power is creating new uses for traditional energy sources like natural gas.

ExxonMobil’s Emission Reduction Solution

Faced with this opportunity, ExxonMobil’s proposed solution is not energy transition, but technological overlay. The company plans to apply its expertise in carbon capture, transportation, and storage (CCS) to address the emission problem from natural gas power generation.

"We’ve already locked in the locations, have ready-made infrastructure, and we undoubtedly have the expertise in the technology for capturing, transporting, and storing CO₂," Woods said on the call. He revealed the company is in talks with power companies to help them decarbonize their power plants.

ExxonMobil aims to capture up to 90% of CO₂, which is very attractive for tech companies and power suppliers relying on natural gas but facing pressure to reduce emissions. Woods’ comments suggest that these negotiations have entered a substantial phase.

A New Growth Path for a Traditional Energy Giant

This move by ExxonMobil is considered a shrewd strategic adjustment aimed at directly linking the company's business to the most popular AI theme in today's market. By providing emission reduction services to the "shovel sellers" of AI—that is, energy infrastructure—this oil giant is opening up a new path of growth.

In recent years, under the wave of ESG (environmental, social, and governance), traditional energy companies such as ExxonMobil have faced enormous pressure. Now, by packaging carbon capture technology as a key solution supporting AI development, the company can not only improve its environmental image but also get a share of the huge capital expenditure in the AI industry.

As Woods said, ExxonMobil may be the only company able to provide such large-scale services in the short term. If this strategy is successfully implemented, it will not only bring new revenue streams to the company, but may also reshape investors’ views of the role of traditional energy companies in the future energy structure.

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