Geothermal Startups Seen Satiating Big Tech's Energy Hunger

Geothermal energy startups are gaining momentum as Big Tech companies, including Meta and Alphabet's Google, explore clean energy solutions to meet the rising energy demands of their AI-driven data centers. These partnerships highlight a growing interest in geothermal electricity, which offers a stable, carbon-free alternative to intermittent renewable sources like wind and solar. The surge in energy consumption from artificial intelligence has accelerated investments in a range of clean technologies, with geothermal energy emerging as a promising contender.

Despite its potential, geothermal faces significant hurdles, including high initial costs for drilling and long project approval times. These challenges have tempered early enthusiasm, with analysts estimating that just over $700 million has been invested in geothermal projects since 2020. Proponents, however, argue that geothermal can be deployed faster than nuclear energy and provides a more consistent power source compared to wind and solar, making it an attractive option for energy-intensive operations such as data centers.

Oil and gas companies, including Devon Energy, Chevron, Diamondback Energy, and Exxon Mobil, are playing a dual role in shaping the energy landscape. While some, like Devon Energy, are investing in geothermal startups such as Fervo Energy, others continue to champion natural gas as a reliable and scalable energy source. These companies are also exploring carbon sequestration technologies to mitigate emissions, positioning natural gas as a transitional fuel in the broader shift to cleaner energy.

The intersection of Big Tech's push for renewable energy and the oil industry's focus on natural gas underscores the complexities of the energy transition. While geothermal energy offers significant advantages, its growth is likely to be shaped by how effectively startups address cost and regulatory challenges and whether they can attract sustained investment amidst competing priorities in the energy sector.