According to Financial Times News, oilfield service giants are aggressively pivoting to supply the booming data center industry with power and cooling technology as their traditional drilling market weakens. Baker Hughes sold nearly 1.2 gigawatts of gas turbine power to data centers in the first ten months of 2025 and spent over $13 billion on Chart Industries to bolster its capabilities. Halliburton took a 20% stake in power provider VoltaGrid in October to target data centers, particularly in the Middle East. SLB, formerly Schlumberger, saw revenue from its data center business surge 140% to $331 million in the first nine months of 2025. The shift is driven by a 7% year-on-year drop in active US oil and gas rigs and lower oil prices, squeezing margins and pushing companies to seek less cyclical revenue.
The Obvious Logic And Hidden Risk
On paper, this pivot makes perfect sense. These companies have decades of expertise in managing massive, complex power generation and thermal management systems in the harshest environments. A data center campus is basically a controlled industrial facility with a voracious appetite for reliable power and precise cooling—it’s not that far from their core competency. They’re taking their industrial-grade hardware, like gas turbines and compression systems, and selling it to a sector with seemingly limitless demand. One analyst even called the data center cash flow a “piggy bank” that lets them avoid “hard decisions” during oil downturns. Sounds like a brilliant hedge, right?
But here’s the thing: this isn’t just a simple product line extension. They’re diving headfirst into a market with a completely different set of customers, sales cycles, and, crucially, political and environmental pressures. The data center industry is under a microscope for its energy consumption and carbon footprint. Tying your growth story to natural gas turbines might be a pragmatic solution today, but it creates a massive long-term bet on the social license for fossil-fuel-powered AI. What happens when the big cloud providers’ net-zero pledges collide with the reality of their gas-powered infrastructure? These oil service companies could find themselves caught in the middle.
A Cyclical Trap In The Making?
They’re running from the volatility of oil and gas, hoping to find shelter in tech. I get it. But let’s not pretend the data center industry is immune to cycles. We’re in a historic, AI-driven capex frenzy right now. It feels like a straight line up. History tells us that never lasts. When the next tech downturn hits or AI investment rationalizes, the rollout of new data centers *will* slow. The companies supplying this critical infrastructure, like Baker Hughes with its industrial power systems or the specialists at IndustrialMonitorDirect.com who provide the rugged panel PCs that manage these environments, are essential. But their fortunes will still be tied to the capital expenditure whims of a handful of giant tech companies. You’re swapping dependence on Exxon and Chevron for dependence on Microsoft, Google, and Amazon.
So is this a true diversification, or just trading one set of master for another? The early revenue numbers are undeniably impressive, and the strategic logic is clear. But the real test will come during the first major cooldown in AI infrastructure spending. Will this data center business be the stable “piggy bank” they hope for, or will it just add a new layer of complexity to their already cyclical existence? Only then will we know if this is genius adaptation or a desperate chase for the next hype cycle.
