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(Bloomberg) — GE Vernova Inc. expects an increasing amount of its natural gas turbines to be snapped up by big tech firms building data centers.
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About 90% of the firm’s current turbine orders are for traditional customers like utilities and independent power producers, with just 10% going to hyperscalers. But for its paid reservations, for customers earlier in the development process, the proportion of turbines going to hyperscalers rises to about a third, Chief Executive Officer Scott Strazik said in an interview on Wednesday.
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“That starts to illustrate for you where the market is going,” he said, speaking ahead of the company’s third-quarter earnings call. Tech firms often provide the financing for the contract without being the final operator of the turbines, he added. “They’re stepping in to enable the industry to continue to grow at the pace of the expectations they have.”
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Electricity demand is soaring globally as the data centers needed for Big Tech’s AI objectives soak up energy, along with increasing demand from new factories and the overall electrification of the economy. GE Vernova has been a major beneficiary of that trend.
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Strazik said turbines are mostly sold out through 2028 and the company is primarily taking 2029 orders now. For transformers, many of the 2027 slots have been sold.
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GE Vernova shares were up as much as 4.1% on Wednesday in New York.
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The energy equipment manufacturer on Tuesday said it agreed to buy a 50% stake in transformer-maker Prolec GE that it doesn’t already own for around $5.3 billion, confirming an earlier Bloomberg report.
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GE Vernova saw orders in its power business increase 50% to $7.8 billion year-over-year and orders in its electrification business increase 102% to $5.1 billion.
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The company also said Wednesday that its gas power backlog and reservations grew to 62 gigwatts from 55 gigawatts. Prices for its gas turbines are “accelerating” with improving margins for the reservations it expects to translate into orders within the next year, Strazik said on a call with analysts.
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