Elon Musk has alerted the industry to a significant supply constraint affecting turbine availability, noting that units are booked through 2030. In response, SpaceX is constructing a manufacturing facility in Bastrop, Texas, to produce turbine components internally, with the company estimating that in-house production could accelerate deployment timelines by up to 18 months.
The shortage has prompted data center operators to explore alternative approaches to backup power generation. Companies such as Applied Digital are increasingly pairing industrial boilers with steam turbines to address the bottleneck in gas turbine procurement. Industry sources indicate that gas turbines ordered currently may not be delivered until 2032, creating an urgent need for alternative solutions.
Gas turbines and steam turbines operate differently despite both ultimately relying on natural gas as fuel. Gas turbines directly convert fuel into electricity through combustion at high temperatures using specialized alloys and manufacturing processes. Steam turbines employ an intermediate step where gas is burned on-site to generate steam that drives the turbine. The steam turbine supply chain, being older and more established, can adjust production volumes more readily, with some manufacturers capable of delivering complete boiler systems within a year.
Major industrial suppliers are capitalizing on this demand shift. Babcock & Wilcox recently secured a $2.4 billion contract with Base Electron to provide 1.2 gigawatts of generation capacity for Applied Digital’s artificial intelligence facilities, with operations expected in 2028. Meanwhile, major technology companies are pursuing long-term power solutions through nuclear energy agreements and renewable energy sources, viewing fossil fuel infrastructure as a temporary bridge to meet immediate capacity needs while transitioning toward cleaner energy objectives.
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