Elon Musk just bought a fossil fuel company for an estimated $1B that could be crucial to his AI hopes — here's the bottleneck he's racing to dodge

Google, Amazon, Meta and others have been exploring various types of direct, on-location power generation over the last few years, and rightfully so, as some AI facilities are forecasted to use double the energy than entire states. Along with being politically contentious, relying on the grid may simply not be feasible for such large projects, especially during the start-up phase, when speed to meet usage needs and thwart competition is of the essence.

APR’s promise of “robust, scalable, and energy-efficient” utilities is what is perhaps most appealing, as the company offers 30- to 60-day turnarounds for infrastructure that would otherwise take years. Owning a power plant, for Musk, means being able to bypass the bottlenecks posed by an unfathomable (and surging) level of demand on limited networks already struggling to serve the general public as is, and the red tape that comes with them.

In addition, the non-renewable aspect isn’t anything new for the SpaceX and Tesla CEO, who already uses fossil fuel power at some of the computing properties of SpaceX’s artificial intelligence arm, xAI. That use, though, landed the subsidiary in litigious hot water, with advocacy groups arguing that the temporary methane turbines at Musk’s Colossus data centers — which power xAI’s Grok, not only a popular large language model but a crucial tool of the US military — violated the Clean Air Act.

A Federal Trade Commission filing from May confirmed Musk as the new owner of APR Energy. Some speculate it could put him far ahead of the game in more ways than one, but could also present issues with emissions and public pushback.