Technology
Geothermal Gets a Glow Up as AI Data Centers Hunt for Always-On Clean Power
Energy Transition
By Rhea Lobo
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Geothermal energy spent decades as a geological curiosity — now AI is turning it into Wall Street’s hottest power play. Fervo Energy recently debuted on the Nasdaq, with shares surging 42% from its IPO price despite minimal revenue. The move highlights how valuable dependable power has become in the race to build AI infrastructure.
Heating up the competition: Geothermal is getting a fresh look as power demand rises and costs start to shift in its favor. Hyperscalers are rushing to fund power that runs around the clock, and rising AI infrastructure spending is only increasing the scramble for reliable electricity. Other options are getting pricier and slower, with Wood Mackenzie estimating gas-turbine prices could be nearly triple 2019 levels by the end of 2027, while new orders can take five years or more to deliver.
Fervo is not the only company benefiting from tech’s growing power demand. Barclays has highlighted oilfield service giants moving into geothermal, including Schlumberger, which is using its drilling and reservoir expertise to speed project development, and Baker Hughes, which won equipment contracts for five power plants at Fervo’s Cape Station site. Ormat Technologies is also seeing momentum, securing a power deal with Google and renewing older contracts at higher prices.
Premium for reliability: Tech companies are willing to pay above-market rates for clean, dispatchable power, and federal tax credits through 2033 make geothermal even more attractive. Fervo’s CFO has said falling drilling costs could make geothermal viable on the East Coast within the next decade, expanding beyond its traditional western US footprint. In a world where shortages could slow AI ambitions, the edge may belong to those feeding the grid.
