Gas Turbine Demand Remains Robust Despite DeepSeek's Energy-Efficient AI

Despite the emergence of energy-efficient AI models like DeepSeek, which could potentially reduce the demand for electricity from data centers, gas turbine demand remains solid, according to Mitsubishi Heavy Industries' (MHI) finance chief, Hisato Kozawa. In an interview, Kozawa expressed no particular concern about the impact of DeepSeek's AI on MHI's turbine business, stating that global power demand continues to rise, and an efficient AI would not affect this trend.



MHI, a global leader in gas turbine manufacturing, reported record third-quarter earnings and raised its net profit forecast for fiscal 2024/25 to 240 billion yen ($1.55 billion), driven largely by strong demand for gas turbines used in power plants. The company's share price has more than doubled over the past year, thanks to growing orders for jets, naval ships, and missiles amid Japan's defense buildup.



The global gas turbine market size is expected to reach USD 9.5 billion by 2030, driven by increasing need for energy-efficient systems, a growing focus on gas-fired power plants, and stringent emission norms. The aero-derivative industrial gas turbine market is projected to grow at a CAGR of 6.1% during the same period, while the >300 MW capacity segment is expected to witness substantial growth.



The European industrial gas turbine market is anticipated to expand at a CAGR of around 5.7% through 2030, while the Latin America market is expected to reach a value of around USD 400 million by 2030. The competitive landscape of the global industrial gas turbine market comprises leading manufacturers such as MHI, Siemens Energy, General Electric, Nanjing Turbine & Electric Machinery, VERICOR, Bharat Heavy Electricals Limited, MAN Energy Solutions, UEC-Saturn, Wartsila, Kawasaki Heavy Industries, Opra Turbines, Baker Hughes Company, and Ansaldo Energia.

In conclusion, despite the potential impact of energy-efficient AI models like DeepSeek on data center electricity demand, gas turbine demand remains robust, driven by factors such as increasing energy efficiency needs, a growing focus on gas-fired power plants, and stringent emission norms. MHI, a leading gas turbine manufacturer, continues to report strong earnings and maintain its market position, with no significant concerns about the impact of DeepSeek's AI on its turbine business.