Baker Hughes Undergoes an AI Makeover

Baker Hughes is wearing a new hat.

Amid the AI rollout, the oil field services giant is supplying energy infrastructure equipment to power-hungry data centers. It’s a makeover that Wall Street can’t get enough of.

Hughes News

Shares of the energy infrastructure firm took a ding following the outbreak of war in Iran (a sudden crunch on Qatar-sourced helium, a key component for AI chips, certainly didn’t help), but the stock has already clawed back its losses and remains up some 28% year-to-date as of market close on Friday. The excitement is obvious: Data centers need strong localized power systems, and Baker Hughes’ portfolio of generators and equipment, typically well-suited to powering remote oil fields, fits perfectly.

In turn, the company is finding a key diversification avenue amid declining sales in its oilfield services and equipment business, making the surge of data center clients a more than welcome development:

• The company said earlier this year that it is on track to double its data center-related orders to $3 billion over the three years through 2027. More recently, the company announced that it had secured contracts to supply equipment capable of delivering up to 250 MW of power for use at Twenty20 Energy’s data center sites in Georgia and Texas.
• “Due to surging demand for generative AI, we see increasing opportunities for our power generation solutions to support behind-the-meter power requirements for data centers,” executive vice president Ganesh Ramaswamy said in a recent statement.

Hit the Gas: The company has similarly pivoted hard in recent months toward liquid natural gas services, a timely gambit as the US becomes perhaps the world’s most reliable LNG provider so long as disruptions in the Strait of Hormuz persist. Company leaders are expected to attend CERAWeek in Houston, Texas, dubbed “the world’s premier energy conference” and hosted by S&P Global. US LNG export terminals are already operating near peak capacity; we have to imagine conference chatter will center on who can deliver product most quickly to Europe and Asia.