Hardly a conference or long-form interview can be held these days without a panelist or pundit commenting on the technology's implications for their profession.

Yet despite being the hottest topic in every circle, AI's ultimate challenge isn't technological but physical. After years of breathless speculation and prediction, the issue remains the same: AI needs more energy.

Data center power consumption

Amidst this backdrop, the oil and gas industry faces a similarly fundamental challenge: a shifting production frontier and evolving path to continued growth. After a decade of efficiency-driven growth, the era of easy barrels is waning. Diamondback Energy CEO Travis Stice captured the new reality in a recent letter, warning of the increasingly dim prospects for expanding production amid geological constraints and rising costs. Other energy majors have issued similar cautions, a sharp departure from the boom years of the shale revolution when abundant, low-cost reserves, followed by shareholder-focused production, made the industry a market favorite.

Now, with resource intensity rising, global volatility accelerating and economic conditions tightening, the industry is under pressure to find its next value horizon.

That horizon may be converging with AI.

The pairing makes increasing sense. While initially circling one another warily, major players in energy and technology have become increasingly intertwined. At major gatherings like CERAWeek, energy executives and tech leaders now share the same stage — and increasingly, the same strategic questions. How do we scale the infrastructure to match exponential AI growth? Who will supply the energy to power it? And how do we do so fast enough while dealing with rising environmental, social and regulatory concerns?

These challenges come amid a stark reality: AI's computational appetite isn't just increasing — it's exploding. Several recent studies demonstrate that power demand will soar by the end of the decade, presenting real challenges for utilities and their customers who are already grappling with rising costs.  

That creates both a dilemma and an opportunity. As federal and state incentives for clean energy projects face legal and political headwinds — even amid substantial private investment — the timeline to deliver renewable power at scale is getting longer. Grid interconnection queues, permitting delays and community opposition remain real barriers. At the same time, nuclear and geothermal technologies hold promise, but even under the best-case scenarios, their rollout will take years to materially shift supply.