Oil giants cross into AI, planning to use carbon capture to reduce emissions for data centers

In the face of the explosive growth in energy demand triggered by AI, traditional oil giant Exxon Mobil is planning to apply its core "carbon capture technology" to an unexpected new field—providing low-carbon power solutions for AI data centers to achieve large-scale emissions reductions.

According to Exxon Mobil CEO Darren Woods, who revealed this during the company's earnings call last Friday, the company is currently engaged in "quite in-depth discussions" with several power suppliers and technology companies, aiming to reduce the carbon emissions of AI data centers that rely on natural gas power through the deployment of carbon capture technology.

Woods clearly stated that the company's goal is to capture 90% of the carbon dioxide emissions produced by natural gas power plants that supply power to data centers. At the same time, he confidently emphasized that for "hyperscale" tech companies seeking low-emission facilities, Exxon Mobil's solution "may be the only realistic option in the short to medium term."

This move comes at a critical moment. Over the past two years, the market has shown a clear divergence: utility stocks related to AI computing power demand, such as electricity, natural gas, and nuclear energy, have surged, while traditional oil exploration and refining stocks, which are linked to oil prices, have performed flatly. Exxon Mobil's new strategy may establish a new connection between traditional energy stocks and high-growth technology themes.

AI Energy Consumption Surge, Natural Gas Becomes a New Choice

The booming development of AI has brought about a huge demand for energy, especially for reliable power that can run 24/7 without interruption.

According to CNBC, the tech industry previously mainly offset its data center carbon emissions by purchasing renewable energy. However, to ensure the stability of power supply, these companies are now turning their attention to nuclear power and natural gas. The reliability of natural gas power generation makes it a backup or primary option to meet the enormous and stable power demands of data centers.

A specific example is that Meta has signed an agreement with Louisiana utility company Entergy to use natural gas to power a data center campus. This trend indicates that despite tech companies having emission reduction targets, the real demand for reliable power has created new application scenarios for traditional energy sources like natural gas.

Exxon Mobil's Emission Reduction Solution

In light of this opportunity, Exxon Mobil's proposed solution is not an energy transition but rather a technological overlay. The company plans to apply its expertise in carbon capture, transportation, and storage (CCS) to address the emissions issues generated by natural gas power generation.

"We have identified locations, have ready-made infrastructure, and undoubtedly possess expertise in the technology of capturing, transporting, and storing carbon dioxide," Woods stated during the conference call. He revealed that the company is in talks with power companies to help them decarbonize their power plants.

Exxon Mobil's goal is to capture up to 90% of carbon dioxide, which is quite attractive for tech companies and power suppliers that rely on natural gas but face emission reduction pressures. Woods' remarks suggest that the relevant negotiations have entered a substantive phase

New Growth Path for Traditional Energy Giants

Exxon Mobil's move is seen as a shrewd strategic adjustment aimed at directly linking the company's business with the hottest AI theme in the current market. By providing emission reduction services for the "shovel sellers" of AI—namely energy infrastructure—this oil giant is opening up a new growth path.

In recent years, traditional energy companies like Exxon Mobil have faced immense pressure under the ESG (Environmental, Social, and Governance) wave. Now, by packaging carbon capture technology as a key solution to support AI development, the company can not only improve its environmental image but also share in the massive capital expenditures of the AI industry.

As Woods stated, Exxon Mobil may be the only company capable of providing such services on a large scale in the short term. If this strategy is successfully implemented, it could not only bring new revenue streams to the company but also reshape investors' perceptions of the role traditional energy companies will play in the future energy landscape