Jet Engines for Data Centres: What the AI Power Crunch Means for Asset Values

The rapid acceleration of artificial intelligence is creating unprecedented pressure on global energy infrastructure. Data centres powering AI training and cloud computing are expanding faster than electricity networks can accommodate, with grid connection delays in some regions stretching up to seven years.

As a result, developers are increasingly turning to unconventional solutions, including aeroderivative turbines adapted from jet engines, alongside large-scale diesel and gas generators, to deliver on-site power at speed.

From a Hickman Shearer perspective, this shift has profound implications for data centre power generation assets, introducing new opportunities, valuation risks, and emerging secondary markets that extend well beyond traditional energy sectors.

AI’s power problem and the rise of on-site generation

AI workloads are exceptionally energy intensive. Training large language models and running hyperscale cloud platforms requires continuous, reliable power, something that grid infrastructure is struggling to supply at pace.

To bridge this gap, data centre operators are deploying behind-the-meter generation as a primary energy source rather than a temporary backup. Demand for fast-deployment power equipment has surged:

• Orders for GE Vernova’s aeroderivative turbines are up by more than a third, with close to 1GW allocated to projects supporting OpenAI, Oracle and SoftBank.

• ProEnergy has sold over 1GW of modified 50MW jet-engine-based turbines.

• Cummins reports supplying 39GW of generator capacity to data centres, with growing interest in using generators as continuous power rather than standby systems.

This rapid shift is reshaping the valuation landscape for data centre power generation assets, particularly those capable of rapid installation and modular deployment.

Aeroderivative turbines and a new high-value asset class

Aeroderivative turbines derived from aircraft engines, are emerging as core infrastructure for AI-led data centres. Their appeal lies in their speed of deployment, modularity, and high power-to-weight ratio.

From a valuation standpoint, this creates a new, relatively liquid asset class with strong technical heritage and proven performance. In the short to medium term, rising demand is supporting firm values, particularly for turbines with clear maintenance records, OEM backing, and upgrade pathways.

However, there is an inherent risk. Values are closely tied to AI investment cycles, hyperscaler capital expenditure, and the pace of grid reinforcement. Should AI expansion slow or alternative power solutions mature, this market could cool rapidly, introducing volatility into resale values.

Legacy generators take on a new role

Diesel and gas generators have traditionally been valued as low-utilisation backup assets. That assumption no longer holds. In several regions, these units are now operating as full-time prime movers, fundamentally changing how they should be assessed.

Higher utilisation accelerates wear and alters depreciation profiles, while strong current demand is temporarily supporting residual values. However, this strength may prove short-lived. Once grid connections improve, oversupply could lead to a sharp softening in values.

Environmental and regulatory risk also looms large. Running generators as primary power raises emissions concerns, and future compliance requirements could drive impairment, retrofitting costs, or enforced reductions in run hours, all of which must be factored into asset valuations.

Speed to deploy becomes a key value driver

One of the clearest valuation trends we are seeing is the premium placed on speed. Large gas turbines often carry long manufacturing and installation lead times, making rapid-deployment equipment a critical competitive advantage.

For data centre power generation assets, this translates into stronger pricing and liquidity for modular, transportable units that can be installed quickly. Conversely, older or less efficient equipment may face declining resilience, particularly if emissions standards tighten.

Assets that can meet immediate demand while remaining adaptable to future regulatory change are best positioned to retain value.

Repurposed jet engines blur sector boundaries

The repurposing of aviation technology for power generation is also blurring traditional sector boundaries. Companies such as Boom Supersonic are selling turbines closely aligned with aircraft engine designs to fund aerospace development.

These hybrid assets sit at the intersection of aviation and power generation, making valuation more complex. Provenance, technical documentation, serviceability, and OEM support are becoming increasingly important in establishing fair market value.

For lenders and investors, cross-sector dependency introduces additional risk considerations, particularly where asset values are exposed to both energy market regulation and aerospace industry cycles.

Cost and emissions will shape future values

Despite their current appeal, behind-the-meter generation systems are not a cheap long-term solution. Modelling by BNP Paribas suggests that gas and diesel systems can cost double the price of grid electricity. Smaller units are also often less efficient, increasing emissions per megawatt generated.

As regulatory scrutiny intensifies, emissions-heavy assets may face accelerated value decline. In contrast, turbines and generators that are hydrogen-ready, hybridised, or capable of integrating with renewable inputs are likely to command future premiums.

What to expect next

Demand for on-site generation is booming, but it is not permanent. When hyperscale cloud companies adjust capital spending or grid capacity catches up, the market for turbines and generators will rebalance quickly.

For Hickman Shearer clients, the focus must be on timing and precision: understanding which data centre power generation assets are likely to retain value, identifying segments that may be overheating, and managing exposure as regulation and energy economics evolve.

On-site generation is a powerful stopgap for AI expansion, but asset values will shift as the market matures.

About Hickman Shearer

At Hickman Shearer, we specialise in delivering exceptional RICS and ASA certified capital asset valuation, management, and sales services. Our expertise span a wide range of global industries, ensuring that we provide tailored and insightful commercial valuations and equipment valuation services to meet your unique needs. With a strong track record of delivering robust and independent advice, we are committed to supporting businesses in achieving their strategic objectives.

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