The United States is now building twice as much gas-fired power capacity as China, a historic reversal driven largely by the explosive growth in electricity demand from data centers powering artificial intelligence, according to a new analysis by Global Energy Monitor (GEM). The report highlights a 76% increase in under-construction gas-fired projects, raising concerns about rising planet-heating emissions even as both countries pursue renewable energy targets.
For decades, China's rapid industrialization and economic expansion meant it consistently outbuilt the United States in natural gas-fired power generation. But a new report from Global Energy Monitor, an independent research organization, reveals that a "frenzy" of data center construction for AI in the US has fundamentally shifted this dynamic.
The analysis found that the US now has more gas-fired capacity under construction than China, a feat not seen in modern history. The total capacity of new gas plants in the US pipeline has jumped 76% compared to previous years, with a significant portion of that demand attributed to the massive energy needs of AI data centers.
These facilities, which house thousands of servers running complex AI models, require vast amounts of electricity—both for computing and for cooling. As tech giants like Google, Microsoft, Amazon, and Meta race to deploy generative AI and cloud services, they are turning to natural gas as a reliable, 24/7 power source to supplement intermittent renewables like solar and wind.
"The US is experiencing a data center construction boom unlike anything we've seen," said a GEM analyst quoted in the report. "Natural gas is the bridge fuel of choice for many developers because it's relatively cheap, abundant, and can be ramped up quickly to meet the unpredictable power demands of AI workloads."
The trend poses a dilemma for climate policy. While natural gas burns cleaner than coal, it still emits significant amounts of carbon dioxide and methane. Environmental groups warn that locking in new gas infrastructure could undermine US commitments to cut emissions by 50% by 2030. The Biden administration has touted clean energy investments, but permitting delays and grid interconnection bottlenecks have slowed the rollout of renewables.
China, meanwhile, continues to build massive amounts of both coal and renewable energy, but its gas-fired construction has slowed as its economy matures and its focus shifts to managing overcapacity in manufacturing.
The GEM report comes amid growing scrutiny of the tech industry's energy footprint. A single large data center can consume as much electricity as a mid-sized city. Companies like Google and Microsoft have pledged to be carbon-negative or carbon-free by 2030, but their near-term reliance on fossil fuels for new data centers has drawn criticism.
Industry groups argue that gas is a necessary transitional solution. "You can't run an AI model on wishful thinking," said a spokesperson for the American Petroleum Institute, declining to comment directly on the report. "Natural gas is keeping the lights on while we scale up the next generation of clean energy technologies."
Climate activists counter that every new gas plant locks in decades of emissions. "This is a false choice," said a representative from the Sierra Club. "We need to build out storage, grid upgrades, and efficiency measures faster—not double down on fossil fuels."
Analysis
Why This Matters
- The reversal of US-China gas buildout trends signals a structural shift in energy demand, directly affecting electricity prices and grid reliability for businesses and households.
- AI's energy appetite is colliding with climate goals — every new gas plant adds decades of committed emissions, making it harder for the US to meet its Paris Agreement targets.
- This sets a precedent: if the world's largest economy chooses gas for AI, emerging economies may follow suit, accelerating global fossil fuel dependency.
Background
For most of the 21st century, China led the world in new natural gas power plant construction as part of its massive industrialization push. The US, flush with shale gas from the fracking boom, built steadily but at a slower pace. The energy transition narrative was dominated by renewables, with gas considered a "bridge fuel." However, the sudden surge in AI — and the data centers needed to support it — caught utilities and grid planners off guard. Demand for electricity in the US, which had been flat for a decade, began rising sharply around 2022, driven by data centers, electric vehicles, and manufacturing reshoring. This has forced utilities to scramble for dispatchable power, turning back to gas.
Key Perspectives
Tech industry leaders (Google, Microsoft, Amazon, Meta): Need reliable, 24/7 power for AI data centers now. See gas as the only scalable option until next-gen nuclear, long-duration storage, or advanced geothermal become viable. They have made public climate pledges but argue their AI innovations will also help solve climate change.
Utility companies and grid operators: Facing unprecedented demand forecasts. They argue that without gas, they cannot ensure grid stability or prevent blackouts. Support faster permitting for both gas and renewables.
Environmental groups and climate scientists: Warn that the AI boom is becoming a "carbon bomb." They urge regulators to reject new gas permits and force tech companies to invest in efficiency, demand response, and massive renewable-plus-storage projects instead.
Global Energy Monitor and energy analysts: Point out that the data shows a clear trend, but note that renewables are still being built alongside gas. The question is whether the gas buildout will slow the transition or whether it will be temporary.
What to Watch
- U.S. Energy Information Administration (EIA) monthly electricity generation data — to see if gas's share of the grid mix rises significantly over the next 12 months.
- FERC decisions on new gas pipeline and plant permits — especially in data center hotspots like Virginia ("Data Center Alley"), Texas, and Ohio.
- Tech company carbon accounting reports — watch for any revisions to 2030 carbon-neutrality goals or increased use of carbon offsets.
- Next wave of nuclear small modular reactor (SMR) announcements — a major tech-funded SMR deal could signal a shift away from gas.