US firm championed for sustainable investment to fund gas-powered data centres

AN INVESTMENT firm once hailed for “taking down big oil” has partnered with US oil and gas giant Chevron to build gas-powered data centres to meet their surging energy demand. 

California-based hedge fund Engine No. 1 announced last month that its joint venture with Chevron and energy company GE Vernova will supply seven gas turbines directly connected to data centres across the US Midwest, Southeast and West regions. They expect to produce 4 GW of power from a target launch date of 2027.

While the plants will be built with “flexibility” to integrate carbon capture and storage (CCS), the companies intend to start generating electricity with or without CCS. Announcing the joint venture last week, Engine No. 1 was explicit in its goal to open the plants by the close of Donald Trump’s presidential term.

The companies have said they do not expect the new power generation to significantly impact consumer electricity prices as electricity will flow directly into the data centres.

According to the International Energy Agency, data centres used between 240 and 340 TWh of energy in 2022, accounting for 1–1.3% of global energy demand. As AI is adopted more widely, data centres are set to become a greater drain on energy supplies.

In 2020, data centres and data transmission networks accounted for just under 1% of global energy-related greenhouse gas emissions, although AI big-hitters Amazon, Meta, Microsoft, and Google generated or purchased enough renewable energy to match their operational electricity use.

Chris James, founder and chief investment officer of Engine No. 1, said: “Energy is the key to America’s AI dominance. By using abundant domestic natural gas to generate electricity directly connected to data centres, we can secure AI leadership, drive productivity gains across our economy and restore America’s standing as an industrial superpower.

“This partnership with Chevron and GE Vernova addresses the biggest energy challenge we face.” 

Scott Strazik, CEO of GE Vernova, said: “We are excited to enable the advancement of data centre growth in the US”.

‘Little hedge fund’

Engine No. 1 gained acclaim among green investors four years ago when it successfully campaigned against ExxonMobil, winning three seats on the oil giant’s board despite owning only 0.2% of the shares. Following a high-profile Wall Street campaign, which the firm said was to force Exxon into adopting a “credible plan to protect value in an energy transition”, the New York Times Magazine celebrated it as “the little hedge fund taking down big oil”.

James has since told the Financial Times that the latest deal with Chevron is “not a pivot” and that he never considered himself to be an “activist investor”, while a spokesperson for Engine No. 1 has said that the Exxon campaign “was not about ideology or fossil fuels or renewables”.

James also wrote in the Wall Street Journal in 2022 that “it makes economic sense to encourage quick-turnaround, high-return oil and gas projects while actively discouraging long-duration, capital-intensive projects with uncertain futures”.

‘American golden age’

Chevron donated more to Republican-aligned political campaigns across the US than it did to Democrats in 2024. However, the company did donate US$202,452 to Kamala Harris’s unsuccessful presidential campaign – more than three times the amount it donated to the Trump campaign.

Since the deal with Engine No. 1 and GE Vernova, Chevron CEO and chairman Mike Wirth has said that the project aligns with “President Trump’s vision for a new American golden age”. He added: “President Trump’s pro-American energy policies and commitment to energy and AI dominance give us the confidence to invest in projects that will create American jobs and strengthen our national security.”